Inflows of capital to developing countries in the 1990s

Reinhart, Carmen and Calvo, Guillermo and Leiderman, Leonardo (1996): Inflows of capital to developing countries in the 1990s. Published in: Journal of Economic Perspectives , Vol. 10, No. 2 (1996): pp. 123-139.

Abstract

Half a decade has passed since the resurgence of international capital flows to many developing countries. The recent surge in capital inflows was initially attributed to domestic developments, such as the sound policies and stronger economic performance of a handful of countries. Eventually, it became clear that the phenomenon was widespread, affecting countries with very diverse characteristics. This pattern suggested that global factors, like cyclical movements in interest rates, were especially important. This paper discusses the principal facts, developments and policies that characterize the current episode of capital inflows to Asia and Latin America.

• Item Type: MPRA Paper
• Language: English
• Keywords: capital flows international interest rates monetary policy exchange rates
• Subjects: F - International Economics > F2 - International Factor Movements and International Business; F - International Economics > F3 - International Finance; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

References

Baldwin, Richard E., and Richard K. Lyons, "Exchange Rate Hysteresis? Large versus Small Policy Misalignments," European Economic Review, January 1994, 38, 1-22.

Calvo, Guillermo A, "Costly Trade Liberalizations: Durable Goods and Capital Mobility," IMF Staff Papers, September 1988, 35,461-73.

Calvo, Guillermo A, "The Perils of Sterilization," IMF Staff Papers, December 1991, 38,921-6.

Calvo, Guillermo A, and Carlos A Vegh, "Exchange-Rate Based Stabilization Under Imperfect Credibility." In Frisch, Helmut, and Andreas Worgotter, eds., Open-Economy Macroeconomics. Basingstoke: Macmillan in association with the International Economic Association, 1993, pp. 3-28.

Calvo, Guillermo A, Leonardo Leiderman, and Carmen M. Reinhart, "Capital Inflows to Latin America: The Role of External Factors," IMF Staff Papers, March 1993, 40, 108-51.

Calvo, Guillermo A, Leonardo Leiderman, and Carmen M. Reinhart, "The Capital Inflows Problem: Concepts and Issues," Contemporary Economic Policy, July 1994a, 12, 54-66.

Calvo, Guillermo A, Leonardo Leiderman, and Carmen M. Reinhart, "Capital Inflows to Latin America: The 1970s and the 1990s." In Bacha, Edmar I., ed., Economics in a Changing World, Volume 4: Development, Trade, and the Environment. London: Macmillan, 1994b, pp. 123-48.

Chuhan, Punam, Stijn Claessens, and Nlandu Mamingi, "Equity and Bond Flows to Latin America and Asia: The Role of External and Domestic Factors," mimeo, World Bank, May 1993.

Diaz-Alejandro, Carlos F., "Stories of the 1930s for the 1980s." In Aspe Armella, Pedro, Rudiger Dornbusch, and Maurice Obstfeld, eds., financial Policies and the World Capital Market: The Problem of Latin American Countries. Chicago: University of Chicago Press, 1983, pp. 5-35.

Dooley, Michael P., "Capital Flight: A Response to Differences in Financial Risks," IMF Staff Papers, September 1988, 35, 422-36.

Dornbusch, Rudiger, "Real Interest Rates, Home Goods, and Optimal External Borrowing," Journal of Political Economy, February 1983, 91, 141-53.

Edwards, Sebastian, "Capital Flows, Foreign Direct Investment, and Debt-Equity Swaps in Developing Countries." In Siebert, Horst, ed., Capital Flows in the World Economy. Tiibingen: Mohr, 1991, pp. 255-81.

Eichengreen, Barry, "Trends and Cycles in Foreign Lending." In Siebert, Horst, ed., Capital Flows in the W d Economy. Tiibingen: Mohr, 1991, pp. 3-28.

El-Erian, Mohamed A, "Rcstoration of Access to Voluntary Capital Market Financing," IMP Staff Papers, March 1992, 39, 175-94.

Feenstra, Robert C., "Anticipated Devaluations, Currency Flight, and Direct Trade Controls in a Monetary Economy," American Economic Review, June 1985, 75,386-401.

Feldstein, Martin, and Charles Horioka, "Domestic Saving and International Capital Flows," Economic Journal, June 1980, 90,314-29.

Fernandez-Arias, Eduardo, "The New Wave of Private Capital Inflows: Push or Pull?," mimeo, World Bank, November 1993.

Frankel, Jeffrey A, “Quantifying International Capital Mobility in the 1980s." In On Exchange Rates. Cambridge: Massachusetts Institute of Technology Press, 1993a, pp. 41-72.

Frankel, Jeffrey A., "Sterilization of Money Inflows: Difficult (Calvo) or Easy (Reisen)?," mimeo, University of California, Berkeley, 1993b.

Gooptu, Sudarshan, "Portfolio Investment Flows to Emerging Markets." In Claessens, Stijn, and Sudarshan Gooptu, eds., Portfolio Investment in Developing Countries. Washington, D.C.: World Bank, 1993, pp. 45-77.

Helpman, E., Leonardo Leiderman, and Gil Bufman, "A New Breed of Exchange Rate Bands: Chile, Israel, and Mexico," Economic Policy, October 1994, 19,259-306.

International Finance Corporation, Emerging Stock Markets Factbook. Magnetic tape, Washington, D.C.: International Finance Corporation, 1994.

International Monetary Fund, International Financial Statistics. Magnetic tape, Washington, D.C.: International Monetary Fund, 1994a.

International Monetary Fund, World Economic Outlook. Magnetic tape, Washington, D.C.: International Monetary Fund, 1994b.

Kiguel, Miguel, and Leonardo Leiderman, "On the Consequences of Sterilized Intervention in Latin America: The Case of Colombia and Chile," mimeo, Tel Aviv University, 1994.

Krugman, Paul, "Private Capital Flows to Problem Debtors." In Sachs, Jeffrey D., ed., Developing Country Debt and the World Economy. Chicago: University of Chicago Press for NBER, 1988, pp. 285-98.

Laban, Rid, and Felipe Larrain, "Can a Liberalization of Capital Outflows Increase Net Capital Inflows?," mimeo, Pontificia Universidad Catolica de Chile, January 1994.

Montiel, Peter, "Capital Mobility in Developing Countries: Some Measurement Issues and Empirical Estimates." Policy Research Working Paper WPS 1103, World Bank, February 1993.

Obstfeld, Maurice, "Capital Flows, thc Current Account, and the Real Exchange Kate: The Consequences of Stabilization and Iiberalization." In Edwards, Sebastian, and Liaquat Aharnrd, eds., Economic Adjustment and Exchange Rates in Deueloping Countries. Chicago: University of Chicago Press, 1986, pp. 201-34.

Reinhart, Carmen M., and Carlos A. Vegh, "Intertemporal Consumption Substitution and Inflation Stabilization: An Empirical Investigation." Working Papers in International Economics No. 3, University of Maryland, Center for International Economics, November 1994.

Sachs, Jeffrey D., and Felipe Larrain, Macroeconomics and the Global Economy. Englewood Cliffs, N.J.: Prentice Hall, 1993.

Schadler, Susan, Maria Carkovic, Adam Bennett, and Robert Khan, "Recent Experiences with Surges in Capital Inflows." IMF Occasional Paper 108, December 1993.