Capital Inflows and Real Exchange Rate Appreciation in Latin America

Reinhart, Carmen and Calvo, Guillermo and Leiderman, Leonardo (1992): Capital Inflows and Real Exchange Rate Appreciation in Latin America. Published in: IMF Staff Papers , Vol. 40, No. 1 (March 1993): pp. 108-151.

Abstract

The characteristfcs of recent capital inflows into Latin America are discussed. It is argued that these inflows are partly explained by conditions outside the region, like recession in the United States and lower international interest rates. This suggests the possibility that a reversal of those conditions may lead to a future capital outflow, fncreasing the macroeconomic vulnerability of Latin American economies. Policy options are argued to be lfmited.

• Item Type: MPRA Paper
• Language: English
• Keywords: capital flow reversals inter national interest rates reserves current account crises
• Subjects: F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F42 - International Policy Coordination and Transmission; F - International Economics > F3 - International Finance > F32 - Current Account Adjustment ; Short-Term Capital Movements; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics; F - International Economics > F3 - International Finance > F31 - Foreign Exchange

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