The Impact of Capital Inflows on Emerging East Asian Economies: Is Too Much Money Chasing Too Little Good?

Soyoung Kim and Doo Yong Yang

No 15, Working Papers on Regional Economic Integration from Asian Development Bank

Abstract: In recent years, emerging East Asian economies have experienced large capital inflows-especially a surge in portfolio inflows-and an appreciation of asset prices such as equities, land, and both nominal and real exchange rates. The paper reviews why a surge in capital inflows can increase asset prices, and then empirically investigates the effects by employing a panel vector autoregression (VAR) model. The empirical results suggest that capital inflows have indeed contributed to the asset price appreciation in this region, although capital inflow shocks explain a relatively small part of asset price fluctuations. How to manage these capital inflows is also discussed.

Keywords: Capital inflows; portfolio inflows; asset prices (search for similar items in EconPapers)
JEL-codes: F10 F31 F32 G15 G18 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2008-05-01
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-mon and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://aric.adb.org/pdf/workingpaper/WP15_Impact_of_Capital_Inflows.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:adbrei:0015

Access Statistics for this paper

More papers in Working Papers on Regional Economic Integration from Asian Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Ivan B. de Leon ().