Reinhart, Carmen (2000): Capital flows to emerging markets: Liberalization, overshooting and volatility (a comment). Published in: Capital Flows and the Emerging Economies: Theories, Evidence, and Controversies, Sebastian Edwards, ed. (Chicago: University of Chicago Press for the NBER, 2000), (2000): pp. 98-104.
Download (38Kb) | Preview
Comment on: Philiippe Bachetta and Eric Van Wincoop, who in this paper aim is to assess the impact of financial liberalization in emerging markets on the dynamics of capital flows to these countries. By positing a cost of absorbing these flows, the authors explain how liberalization can give rise to an “overshooting” of capital inflows and asset prices. In addition, the authors examine whether incomplete information can give rise to a high degree of volatility in capital flows as well as to contagion. They also suggest that deviations in capital inflows from their steady-state levels can be used as a potential signal of future crises.
|Item Type:||MPRA Paper|
|Original Title:||Capital flows to emerging markets: Liberalization, overshooting and volatility (a comment)|
|English Title:||apital flows to emerging markets: Liberalization, overshooting and volatility (a comment)|
|Keywords:||Capital flows liberalization investment volatility asset price bubbles|
|Subjects:||F - International Economics > F3 - International Finance
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
|Depositing User:||Carmen Reinhart|
|Date Deposited:||06. Feb 2009 09:42|
|Last Modified:||16. Feb 2013 15:09|
Calvo, Guillermo A., and Carmen M. Reinhart. 1999. When capital inflows come to a sudden stop: Consequences and policy options. In Key issues in reform of the international monetary and financial system, ed. P. Kenen, M. Mussa, and A. Swoboda. Washington, D.C.: International Monetary Fund, forthcoming.
Edwards, Sebastian, and Carlos Vegh. 1997. Banks and macroeconomic disturbances under predetermined exchange rates. Journal of Monetary Economics 40 (November): 239-78.
Galbis, Vicente. 1993. High real interest rates under financial liberalization: Is there a problem? IMF Working Paper no. 93/7. Washington, D.C.: International Monetary Fund.
Goldfajn, Ilan, and Rodrigo Valdes. 1995. Balance of payment crises and capital flows: The role of liquidity. Cambridge, Mass.: Massachusetts Institute of Technology. Mimeo.
Kaminsky, Graciela, and Carmen M. Reinhart. 1998. Financial crises in Asia and Latin America: Then and now. American Economic Review 88, no. 2 (May): 444-49.
Kaminsky, Graciela, and Carmen M. Reinhart. 1999. The twin crises: The causes of banking and balance of payments problems. American Economic Review 89, no. 3 (June): 473-500.
Krugman, Paul. 1998. Bubble, boom, crash: Theoretical notes on Asia’s crisis. Cambridge, Mass.: Massachusetts Institute of Technology. Mimeo.
McKinnon, Ronald, and Huw Pill. 1996. Credible liberalizations and international capital flows: The overborrowing syndrome. In Financial deregulation and integration in East Asia, ed. T. Ito and A. Krueger, 7-42. Chicago: University of Chicago Press.
Montiel, Peter, and Carmen M. Reinhart. 1999. Do capital controls influence the volume and composition of capital flows? Evidence from the 1990s. Journal of International Money and Finance 18, no. 4 (August): 619-35.