 How Important is Sound Domestic Macroeconomics in Attracting Capital Inflows to Developing Countries?Chapter 9 in International Finance and the Developing Economies, 2004, pp 141-168 from Palgrave Macmillan Abstract: Abstract Developing countries tend to run current account balance of payments deficits on their trade in goods and services. Decumulating international reserves as a means of financing such deficits is not a long-term option, and may not even be a short-term option where reserves are already meagre. Inflows of capital in the form of either foreign aid or private capital offer a potential alternative. Failing to attract capital inflows implies that national income and domestic living standards will have to decline. An imbalance where domestic saving falls short of domestic investment either calls for foreign financing or for corrective domestic action which reduces consumption or investment. Given the related adjustment costs, developing countries will be anxious to make themselves attractive to foreign creditors. But how can they do this? Keywords: International Monetary Fund; Foreign Investor; Current Account; Capital Flow; Capital Inflow (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-59984-0_9 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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