Capital Inflows, Exchange Rate Flexibility, and Domestic Credit

Carmen Reinhart

MPRA Paper from University Library of Munich, Germany

Abstract: Protracted expansionary monetary policies in advanced countries have renewed the debate over policy options to cope with large capital inflows that drive credit expansions in emerging economies. In a forthcoming paper, we show that during capital inflow bonanzas credit grows more rapidly and its composition tilts to foreign currency in economies with less flexible exchange rate regimes. Hence, carefully crafted macro-prudential measures may complement macroeconomic policies.

Keywords: capital inflows; exchange rates; credit; banks; vulnerability; macroprudential; capital controls (search for similar items in EconPapers)
JEL-codes: F0 F2 F3 F62 G01 N25 N26 (search for similar items in EconPapers)
Date: 2012-01
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Citations: View citations in EconPapers (41)

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Related works:
Journal Article: Capital Inflows, Exchange Rate Flexibility and Credit Booms (2014)
Working Paper: Capital Inflows, Exchange Rate Flexibility, and Credit Booms (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:51263

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