The Effects of Inflation and Exchange Rate Policies on Direct Investment to Developing Countries

Young Seok Ahn, Slamet Seno Adji and Thomas Willett

International Economic Journal, 1998, vol. 12, issue 1, 95-104

Abstract: This study focuses on the effects of inflation and exchange rate policy on direct investment flows to developing countries. We find that inflation does have a substantial negative effect on capital inflows. Our estimates indicate that this effect can be significantly reduced, but not eliminated, by following exchange rate policies which avoid substantial overvaluation of the currency. [F 30]

Date: 1998
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DOI: 10.1080/10168739800000006

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