Economics at your fingertips  

Capital Flows at Risk: Taming the Ebbs and Flows

R. Gaston Gelos, Lucyna Gornicka (), Robin Koepke, Ratna Sahay and Silvia Sgherri

No 2019/279, IMF Working Papers from International Monetary Fund

Abstract: The volatility of capital flows to emerging markets continues to pose challenges to policymakers. In this paper, we propose a new framework to answer critical policy questions: What policies and policy frameworks are most effective in dampening sharp capital flow movements in response to global shocks? What are the near- versus medium-term trade-offs of different policies? We tackle these questions using a quantile regression framework to predict the entire future probability distribution of capital flows to emerging markets, based on current domestic structural characteristics, policies, and global financial conditions. This new approach allows policymakers to quantify capital flows risks and evaluate policy tools to mitigate them, thus building the foundation of a risk management framework for capital flows.

Keywords: WP; portfolio inflow; portfolio; capital flow; Capital flows; macroprudential policies; foreign-exchange intervention; capital controls; emerging markets; flow risk; Bbb yield; capital flow volatility; flows data; FX intervention; capital flows data; capital flow measure; risks to capital flow; flows to emerging markets; capital flow risk; capital withdrawal; Exchange rate arrangements; Capital flow management; Emerging and frontier financial markets; Global (search for similar items in EconPapers)
Pages: 44
Date: 2019-12-20
New Economics Papers: this item is included in nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21) Track citations by RSS feed

Downloads: (external link) (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
Journal Article: Capital flows at risk: Taming the ebbs and flows (2022) Downloads
Working Paper: Capital Flows at Risk: Taming the Ebbs and Flows (2021) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().

Page updated 2023-06-05
Handle: RePEc:imf:imfwpa:2019/279