Author: Mr.Tidiane Kinda
Publisher: International Monetary Fund
ISBN: 1455211877
Category : Business & Economics
Languages : en
Pages : 35
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Book Description
This paper analyzes the impact of capital inflows and exchange rate flexibility on the real exchange rate in developing countries based on panel cointegration techniques. The results show that public and private flows are associated with a real exchange rate appreciation. Among private flows, portfolio investment has the highest appreciation effect-almost seven times that of foreign direct investment or bank loans-and private transfers have the lowest effect. Using a de facto measure of exchange rate flexibility, we find that a more flexible exchange rate helps to dampen appreciation of the real exchange rate stemming from capital inflows.
Author: Rebecca Driver
Publisher: Routledge
ISBN: 1134261977
Category : Business & Economics
Languages : en
Pages : 456
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Book Description
Combining thorough scholarship with illuminating real-world examples, this edited collection provides insights on the causes and consequences of movements in both exchange rates and external assets and has a strong focus on the policy implications of operating in an open economy, particularly the choice of exchange rate and monetary policy, exchange rate intervention and policies on capital mobility.
Author: Mr.Nicolas E. Magud
Publisher: International Monetary Fund
ISBN: 1475543735
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
We document the behavior of macro and credit variables during episodes of capital inflows reversals in economies with different degrees of exchange rate flexibility. We find that exchange rate flexibility is associated with milder credit growth during the boom but, even though smaller than in more rigid regimes, it cannot shield the economy from a credit reversal. Furthermore, we observe what we dub as a recovery puzzle: credit growth in economies with more flexible exchange rate regimes remains tepid well after the capital flow reversal takes place. This results stress the complementarity of macro-prudential policies with the exchange rate regime. More flexible regimes could help smoothing the credit cycle through capital surchages and dynamic provisioning that build buffers to counteract the credit recovery puzzle. In contrast, more rigid exchange rate regimes would benefit the most from measures to contain excessive credit growth during booms, such as reserve requirements, loan-to-income ratios, and debt-to-income and debt-service-to-income limits.
Author: Reuven Glick
Publisher: Cambridge University Press
ISBN: 9780521623230
Category : Business & Economics
Languages : en
Pages : 148
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Book Description
"This is a very timely book that brings the reader to the forefront of current research on macroeconomic policy issues in economies subject to sizable capital flows".--Guillermo A. Calvo, University of Maryland.
Author: Mr.Nicolas E. Magud
Publisher: International Monetary Fund
ISBN: 1463936427
Category : Business & Economics
Languages : en
Pages : 24
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Book Description
The prospects of expansionary monetary policies in the advanced countries for the foreseeable future have renewed the debate over policy options to cope with large capital inflows that are, at least partly, driven by low interest rates in the financial centers. Historically, capital flow bonanzas have often fueled sharp credit expansions in advanced and emerging market economies alike. Focusing primarily on emerging markets, we analyze the impact of exchange rate flexibility on credit markets during periods of large capital inflows. We show that bank credit grows more rapidly and its composition tilts to foreign currency in economies with less flexible exchange rate regimes, and that these results are not explained entirely by the fact that the latter attract more capital inflows than economies with more flexible regimes. Our findings thus suggest countries with less flexible exchange rate regimes may stand to benefit the most from regulatory policies that reduce banks' incentives to tap external markets and to lend/borrow in foreign currency; these policies include marginal reserve requirements on foreign lending, currency-dependent liquidity requirements, and higher capital requirement and/or dynamic provisioning on foreign exchange loans.
Author: Mr.Alexander W. Hoffmaister
Publisher: International Monetary Fund
ISBN: 1451855877
Category : Business & Economics
Languages : en
Pages : 50
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Book Description
This paper examines the links between capital inflows and the real exchange rate under pegged exchange rates. The analytical framework is described, and a near-VAR model linking capital inflows, interest rate differentials, government spending, money base velocity, and the temporary component of the real exchange rate (TCRER) is estimated for Korea, Mexico, the Philippines, and Thailand. TCRER movements are associated only weakly with shocks to capital flows. Negative shocks to U.S. interest rates lead to capital inflows in Asia and a TCRER appreciation in the Philippines and Thailand. Positive shocks to government spending have a small but statistically significant effect on the TCRER for Korea.
Author: Sebastian Edwards
Publisher: Cambridge University Press
ISBN: 9780521597111
Category : Business & Economics
Languages : en
Pages : 452
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Book Description
The essays collected in this volume discuss the impact of increased capital mobility on macroeconomic performance.
Author: Suiwah Leung
Publisher: Australian National University, Research School of Social Sciences
ISBN:
Category : Business & Economics
Languages : en
Pages : 44
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Book Description
Booklet examining the responses of several Asian countries to recent surges in capital inflows. Examines the difficulties faced by these countries in trying to maintain pegged exchange rates and monetary independence.
Author: Mr.Alejandro Lopez Mejia
Publisher: International Monetary Fund
ISBN: 1451843518
Category : Business & Economics
Languages : en
Pages : 55
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Book Description
This paper reviews the causes, consequences, and policy responses to large capital flows in several emerging markets. It opens by studying recent patterns of capital flows, and then discusses the causes of capital flows. Emphasis is given to the reasons behind the capital inflow episode in the 1990s, the major reversals, and the volatility observed in these flows. The paper goes on to examine the consequences of capital inflows and the pros and cons of alternative policy responses. It concludes with policy lessons derived from country experiences.
Author: George Fane
Publisher: Edward Elgar Publishing
ISBN: 9781781957967
Category : Business & Economics
Languages : en
Pages : 238
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Book Description
If flexible exchange rates are not adopted, central banks should at least avoid the widespread practice of trying to sterilise the monetary effects of capital flows." "The author argues that the implementation of this plan will be a far more effective way of enhancing financial stability than controlling international capital flows, or trying to force private lenders to make new loans to countries that suffer crises."--BOOK JACKET.
