The capital inflows problem: Concepts and issues

Reinhart, Carmen and Calvo, Guillermo and Leiderman, Leonardo (1994): The capital inflows problem: Concepts and issues. Published in: Contemporary Economic Policy , Vol. 12, No. 3 (July 1994): pp. 54-66.

Abstract

Since 1990 capital has flowed from industrial countries to developing regions like Latin America, and parts of Asia. Reentry into international capital markets is a welcome turn of events for most countries. However, capital inflows are often associated with inflationary pressures, a real exchange rate appreciation, a deterioration in the current account, and a boom in bank lending. This paper briefly examines how these inflows have altered the macroeconomic environment in a number of Asian and Latin American countries. The pros and cons of the policy options are discussed.

• Item Type: MPRA Paper
• Language: English
• Keywords: capital flows real exchange rate international reserves current account deficit volatility fiscal policy
• Subjects: F - International Economics > F1 - Trade > F10 - General; F - International Economics > F3 - International Finance > F30 - General; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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