IDEAS home Printed from
   My bibliography  Save this paper

Capital Inflows to Latin America: The 1970s and 1990s


  • Reinhart, Carmen
  • Calvo, Guillermo
  • Leiderman, Leonardo


For the first time since the onset of the debt crisis in the slimmer or 1982, capital began to return to Latin America during 1990 and 1991.In general, Latin America's re-entry into the international capital markets was perceived as a positive development. However, policy-makers in the region have also voiced concern about the less favourable side-effects of these capital inflows. First, it was feared that the real exchange rate appreciation that of tell accompanies these inflows would adversely affect the international competitiveness of the export sector. Second, there was concern thatthe inflows could be reversed abruptly, possibly doing considerable damage to the domestic financial system in the process. The fear (If reversal was based on the experience of the debt crisis, which followed on the heels of the 'capital bonanza' of 1978-81. This chapter compares the recent capital inflows experience with that of the late 1970s. The analysis examines the differences and similarities between the two episodes over three broad areas:1. Domestic macroeconomic conditions in the recipient countries at the outset of both episodes. 2. The behaviour of the external factors that influence the international allocation of capital.3. The response of key macroeconomic variables, such as the real exchange rate, reserves, and stock prices to the inflow of capital.

Suggested Citation

  • Reinhart, Carmen & Calvo, Guillermo & Leiderman, Leonardo, 1994. "Capital Inflows to Latin America: The 1970s and 1990s," MPRA Paper 8196, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8196

    Download full text from publisher

    File URL:
    File Function: original version
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Donald J Mathieson & Liliana Rojas-Suárez, 1992. "Liberalization of the Capital Account; Experiences and Issues," IMF Working Papers 92/46, International Monetary Fund.
    2. Alexander K. Swoboda & Jacob A. Frenkel & Jacques R. Artus, 1983. "Exchange Rate Regimes and European-U.S. Policy Interdependence [with Comments] (Régimes de taux de change et interdépendance des politiques économiques en Europe et aux Etats-Unis) (Régimen cambia," IMF Staff Papers, Palgrave Macmillan, vol. 30(1), pages 75-112, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:8196. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.