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Dealing with large and volatile capital flows and the role of the IMF

Menno Broos, Michalis Ghalanos, Bernard Kennedy, Alexander Landbeck, Christina Lerner, Paula Menezes, Alessandro Schiavone (), Thomas Tilley, Francesca Viani (), Dennis Reinhardt (), Paul Metzemakers, L´Hotellerie-Fallois, Pilar, Pablo Moreno, Irina Balteanu (), John Beirne (), Axel Brüggemann, Matthieu Bussiere (), Angel Estrada (), Jon Frost (), Valerie Herzberg and Benjamin Vonessen
Authors registered in the RePEc Author Service: Pilar L'Hotellerie-Fallois ()

No 180, Occasional Paper Series from European Central Bank

Abstract: The last decade has been characterised by the pronounced volatility of capital flows. While cross-border capital flows can have many benefits for both advanced and emerging market economies, they may also carry risks, which require appropriate policy responses. Disentangling the push from the pull factors driving capital flows is key to designing appropriate policies to deal with them. Strong institutions, sound fundamentals and a large domestic investor base tend to shield economies from adverse global conditions and attract less volatile types of capital. However, when the policy space for using traditional macroeconomic policies is limited, countries may also turn to macroprudential and capital flow management policies in a pragmatic manner. The IMF can play an important role in helping countries to deal with capital flows, through its surveillance and lending policy and through international cooperation. JEL Classification: F3, F32, F38, F42, F65, G28

Keywords: capital flow management; capital flows; IMF; international cooperation (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-opm
Date: 2016-09
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Handle: RePEc:ecb:ecbops:2016180