The Capital Inflows Problem: Concepts and Issues

Carmen Reinhart, Leonardo Leiderman and Guillermo Calvo

No 1993/010, IMF Policy Discussion Papers from International Monetary Fund

Abstract: Since 1990 capital has started to move from industrial countries to developing regions like Latin America, the Middle East and parts of Asia. Reentry into international capital markets is a welcome turn of events for most countries. However, capital inflows are often associated with inflationary pressures, a real exchange rate appreciation, a deterioration in the current account, and a boom in bank lending. This paper briefly examines how these inflows have altered the macroeconomic environment in a number of Asian and Latin American countries. The pros and cons of a menu of policy options are discussed.

Keywords: PDP; interest rate; appreciation; group; Asia; decreasing returns; rate of return; exchange rate volatility; hot money; deposit requirements; resource allocation; real exchange rate appreciation; capital account surplus; nominal exchange rate; Capital inflows; Real exchange rates; Capital flows; Capital account; International reserves; Asia and Pacific; Southeast Asia (search for similar items in EconPapers)
Pages: 37
Date: 1993-08-01
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Citations: View citations in EconPapers (24)

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Related works:
Journal Article: THE CAPITAL INFLOWS PROBLEM: CONCEPTS AND ISSUES (1994)
Working Paper: The capital inflows problem: Concepts and issues (1994)
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