Capital Flows Capital Controls And Currency Crises
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Author : Sebastian Edwards Publisher : University of Chicago Press Page : 699 pages File Size : 52,8 Mb Release : 2009-02-15 Category : Business & Economics ISBN : 9780226184999
Capital Controls and Capital Flows in Emerging Economies by Sebastian Edwards Pdf
Some scholars argue that the free movement of capital across borders enhances welfare; others claim it represents a clear peril, especially for emerging nations. In Capital Controls and Capital Flows in Emerging Economies, an esteemed group of contributors examines both the advantages and the pitfalls of restricting capital mobility in these emerging nations. In the aftermath of the East Asian currency crises of 1997, the authors consider mechanisms that eight countries have used to control capital inflows and evaluate their effectiveness in altering the maturity of the resulting external debt and reducing macroeconomic vulnerability. This volume is essential reading for all those interested in emerging nations and the costs and benefits of restricting international capital flows.
Short-Term Capital Flows and Economic Crises by Stephany Griffith-Jones,Manuel F. Montes,Anwar Nasution Pdf
The currency crises that engulfed East Asian economies in 1997 and Mexico in 1994 - and their high development costs - raise a serious concern about the net benefits for developing countries of large flows of potentially reversible short-term international capital. Written by senior policy-makers and academics, the contributions to this volume examine in depth the macroeconomic and other policy dilemmas confronting public authorities in the emerging economies as they deal with short-term capital movements, especially in the period before the outbreak of these crises. The studies are based on comparative case studies of key emerging economies. Valuable insights are also derived from contrasts between the East Asian, Latin American, African, and European experiences, between the financial and real effects of financial flows, and between private and public responsibilities in managing financial markets. The great value of the chapters in this volume is that they analytically identify the weaknesses in both domestic and international capital market regimes. The recommendations derived from this analysis apply to the development of financial markets in developing countries, the monitoring and regulation of mutual funds in source countries, and the future development of international capital markets. They will make an important contribution both to the discussion of national policies and of a new international financial architechture.
Capital Controls by Ms.Inci Ötker,Mr.Akira Ariyoshi,Mr.Jorge Iván Canales Kriljenko,Mr.Karl Friedrich Habermeier,Mr.Andrei Kirilenko,Mr.Bernard Laurens Pdf
This paper examines country experiences with the use and liberalization of capital controls to develop a deeper understanding of the role of capital controls in coping with volatile capital flows, as well as the issues surrounding their liberalization. Detailed analyses of country cases aim to shed light on the motivations to limit capital flows; the role the controls may have played in coping with particular situations, including in financial crises and in limiting short-term inflows; the nature and design of the controls; and their effectivenes and potential costs. The paper also examines the link between prudential policies and capital controls and illstrates the ways in which better prudential practices and accelerated financial reforms could address the risks in cross-border capital transactions.
Capital Mobility, Exchange Rates, and Economic Crises by George Fane Pdf
If flexible exchange rates are not adopted, central banks should at least avoid the widespread practice of trying to sterilise the monetary effects of capital flows." "The author argues that the implementation of this plan will be a far more effective way of enhancing financial stability than controlling international capital flows, or trying to force private lenders to make new loans to countries that suffer crises."--BOOK JACKET.
Capital Controls in Times of Crisis – Do They Work? by Apoorv Bhargava,Romain Bouis,Annamaria Kokenyne,Manuel Perez-Archila,Umang Rawat,Ms. Ratna Sahay Pdf
This paper provides an analysis of the use and effects of capital controls in 27 AEs and EMDEs which experienced at least one financial crisis between 1995 and 2017. Countries often turn to using capital controls in crisis: some ease inflow controls while others tighten controls on outflows. A key finding is that countries with pervasive controls before the start of the crisis are shielded compared to countries with more open capital accounts, which see a significant decline in capital flows during crises. In contrast, the effectiveness of capital controls introduced during crises appears to be weak and difficult to identify. There is also some evidence that the introduction of outflow controls during crises is negatively associated with sovereign debt ratings, but that investors may actually forgive with time.
Crisis and Recovery in Malaysia by Prema-chandra Athukoralge Pdf
'Professor Athukorala tells a fascinating story of one of the most successful economies in the world economy in the last decades, from the inception of its liberalisation policy to its radical decision to pursue an independent recovery path after the 1997 Asian financial crisis. This is case-study economics at its best. The book is superbly organised, meticulously researched and clearly written; a treat for professional economists and policymakers alike.' - Tony Thirlwall, University of Kent, UK 'Malaysia is one of the great success stories of the last quarter of the twentieth century. From 1988 it had one of the highest growth rates in the world, and it managed to maintain ethnic peace in an undoubtedly difficult environment. Recently it has provided a major laboratory experiment of the use of capital controls at a time of crisis when a country is highly integrated in the world capital market. This excellent book presents the first careful analysis of the nature and effects of these controls, as well as providing a thorough background of how the Asian crisis played out in Malaysia.' - W.Max Corden, The Johns Hopkins University, US In the light of the Malaysian experience during the Asian financial crisis, this book examines the role of international capital mobility in making countries susceptible to financial crises and the use of capital controls as a crisis management tool. Malaysia provides an interesting case study of this subject given its significant capital market liberalisation prior to the onset of the crisis, and its fundamental shift in crisis management policy in September 1998. The prime focus of the book is on Malaysia's radical policy decision to pursue an independent recovery path, cut off from world markets by a system of capital control, as a viable alternative to the conventional market centred approach. The analysis suggests that, against the initial dire predictions of many economists, the capital controls have actually played a crucial supportive role in crisis management. Whether the controls have played a special role in delivering a superior recovery outcome in Malaysia compared to IMF-program countries remains a point of contention. However, there is strong evidence to suggest that this pragmatic policy choice was instrumental in achieving recovery, while minimising potential economic disruption and related social costs.
What’s In a Name? That Which We Call Capital Controls by Mr.Atish R. Ghosh,MissMahvash Qureshi Pdf
This paper investigates why controls on capital inflows have a bad name, and evoke such visceral opposition, by tracing how capital controls have been used and perceived, since the late nineteenth century. While advanced countries often employed capital controls to tame speculative inflows during the last century, we conjecture that several factors undermined their subsequent use as prudential tools. First, it appears that inflow controls became inextricably linked with outflow controls. The latter have typically been more pervasive, more stringent, and more linked to autocratic regimes, failed macroeconomic policies, and financial crisis—inflow controls are thus damned by this “guilt by association.” Second, capital account restrictions often tend to be associated with current account restrictions. As countries aspired to achieve greater trade integration, capital controls came to be viewed as incompatible with free trade. Third, as policy activism of the 1970s gave way to the free market ideology of the 1980s and 1990s, the use of capital controls, even on inflows and for prudential purposes, fell into disrepute.
Capital Flight and Capital Controls in Developing Countries by Gerald A. Epstein Pdf
Capital flight - the unrecorded export of capital from developing countries - often represents a significant cost for developing countries. It also poses a puzzle for standard economic theory, which would predict that poorer countries be importers of capital due to its scarcity. This situation is often reversed, however, with capital fleeing poorer countries for wealthier, capital-abundant locales. Using a common methodology for a set of case studies on the size, causes and consequences of capital flight in developing countries, the contributors address the extent of capital flight, its effects, and what can be done to reverse it. Case studies of Brazil, China, Chile, South Africa, Thailand, Turkey and the Middle East provide rich descriptions of the capital flight phenomena in a variety of contexts. The volume includes a detailed description of capital flight estimation methods, a chapter surveying the impact of financial liberalization, and several chapters on controls designed to solve the capital flight problem. The first book devoted to the careful calculation of capital flight and its historical and policy context, this volume will be of great interest to students and scholars in the areas of international finance and economic development.
Author : Sebastian Edwards,Jeffrey A. Frankel Publisher : University of Chicago Press Page : 783 pages File Size : 46,7 Mb Release : 2009-02-15 Category : Business & Economics ISBN : 9780226185057
Preventing Currency Crises in Emerging Markets by Sebastian Edwards,Jeffrey A. Frankel Pdf
Economists and policymakers are still trying to understand the lessons recent financial crises in Asia and other emerging market countries hold for the future of the global financial system. In this timely and important volume, distinguished academics, officials in multilateral organizations, and public and private sector economists explore the causes of and effective policy responses to international currency crises. Topics covered include exchange rate regimes, contagion (transmission of currency crises across countries), the current account of the balance of payments, the role of private sector investors and of speculators, the reaction of the official sector (including the multilaterals), capital controls, bank supervision and weaknesses, and the roles of cronyism, corruption, and large players (including hedge funds). Ably balancing detailed case studies, cross-country comparisons, and theoretical concerns, this book will make a major contribution to ongoing efforts to understand and prevent international currency crises.
Inhaltsangabe:Abstract: When on June 2nd 1997 Thailand devalued its currency, the stage was set was the most severe and virulent currency crisis of that decade. The sudden reversal of capital flows depleted economic wealth and social cohesion in many East Asian countries, hitherto perveived to belong to the Asian Miracle. Shockwaves of the crisis were felt in most emerging markets, even those outside the region, and reached mature markets when, for instance, the hedge fund Long-Term Capital Management nearly collapsed. In face of these enormous costs, this paper analyses the possibilities and boundaries of attempts to either reduce the likeliness of respective financial shocks or, when unavoidable, lower the costs of managing these crises. On the ground of the state-of-the-art models of currency crises it is examined which domestic or international factors contributed most to the observed outcome. The guiding question is if either moral hazard considerations, in the form of governmental guarantees and alike, or approaches of multiple equilibria are more suited to serve as an explanation. Moreover, this paper illuminates the significance of the original sin hypothesis which states that emerging markets are constrained when trying to borrow abroad in domestic currency or, even when trying at home, to borrow long-term. Although it is acknowledged that all these factors are valid simultaniously, superior importance in the following parts is given on the multiple equilibria approach. The main part of the paper discusses the most influencial reform proposals of academics and institutions such as the IMF or the Group of 22. Approaches for a new financial architecture are divided into issues of the exchange-rate regime, public and private liquidity, and the institutional framework. These recommandations include questions of dollarization; an international lender of last resort; insurance agencies and credit facilities; capital controls; improved regulation and transparency; as well as the addidition of collective action clauses and alike to international bond contracts. They are assessed according to the criteria developed before, especially with regard to the approaches of moral hazard, multiple equilibria, and original sin. Taking into account that any grand scheme is rather unlikely to be realized on short notice, the conclusions concentrate on moderest reform proposals which can be pursued by emerging countries indiviually or with the assistance [...]
Author : Martin Feldstein Publisher : University of Chicago Press Page : 500 pages File Size : 40,5 Mb Release : 2007-12-01 Category : Business & Economics ISBN : 9780226241807
International Capital Flows by Martin Feldstein Pdf
Recent changes in technology, along with the opening up of many regions previously closed to investment, have led to explosive growth in the international movement of capital. Flows from foreign direct investment and debt and equity financing can bring countries substantial gains by augmenting local savings and by improving technology and incentives. Investing companies acquire market access, lower cost inputs, and opportunities for profitable introductions of production methods in the countries where they invest. But, as was underscored recently by the economic and financial crises in several Asian countries, capital flows can also bring risks. Although there is no simple explanation of the currency crisis in Asia, it is clear that fixed exchange rates and chronic deficits increased the likelihood of a breakdown. Similarly, during the 1970s, the United States and other industrial countries loaned OPEC surpluses to borrowers in Latin America. But when the U.S. Federal Reserve raised interest rates to control soaring inflation, the result was a widespread debt moratorium in Latin America as many countries throughout the region struggled to pay the high interest on their foreign loans. International Capital Flows contains recent work by eminent scholars and practitioners on the experience of capital flows to Latin America, Asia, and eastern Europe. These papers discuss the role of banks, equity markets, and foreign direct investment in international capital flows, and the risks that investors and others face with these transactions. By focusing on capital flows' productivity and determinants, and the policy issues they raise, this collection is a valuable resource for economists, policymakers, and financial market participants.
Revisiting the Determinants of Capital Flows to Emerging Markets--A Survey of the Evolving Literature by Swarnali Ahmed Hannan Pdf
This paper documents the evolution of gross and net capital flows to emerging market economies and surveys the large literature on the potential drivers. While the capital flow landscape has been shaped by the evolution of both global and country-specific factors, the relative importance of these factors has varied over time and differs depending on the type of capital flows. The findings from the survey of the literature thus underscores the importance of policies in both source and recipient countries in shaping capital flows.
