Recent Issues in Capital Flows \Trends in Capital Inflows to Japan & Asia and Challenges Ahead \

Kazuaki Washimi
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Kazuaki Washimi: Bank of Japan

No 20-E-4, Bank of Japan Review Series from Bank of Japan

Abstract: While international capital transactions can improve economic welfare through the efficient allocation of resources across borders, they can also lead to the destabilization of an economy due to sudden reversals of capital flows. Nevertheless, empirical analyses have shown mixed results depending on the countries and transactions on which the analyses have focused, which highlights that there are different effects depending on the type and contents of the capital transaction. This report introduces recent issues in capital flows and summarizes developments in capital inflows to Asia including Japan. From that perspective, in the medium to long term, Japan will continue to face the challenges in attracting inward FDI and maximizing spillover effects for economic growth, while emerging Asian nations need to develop domestic financial markets and manage the impact of excessive volatility of inward portfolio investments.

Keywords: International Capital Flows; Foreign Direct Investment; Foreign Portfolio Investment (search for similar items in EconPapers)
JEL-codes: F21 F32 (search for similar items in EconPapers)
Date: 2020-07-08
New Economics Papers: this item is included in nep-int and nep-sea
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