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THE CAPITAL INFLOWS PROBLEM: CONCEPTS AND ISSUES
Author(s) -
CALVO GUILLERMO A.,
LEIDERMAN LEONARDO,
REINHART CARMEN M.
Publication year - 1994
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.1994.tb00434.x
Subject(s) - latin americans , economics , capital flows , boom , exchange rate , international economics , capital (architecture) , current account , capital account , macroeconomics , monetary economics , capital market , developing country , finance , market economy , economic growth , political science , geography , archaeology , liberalization , environmental engineering , law , engineering
Since 1990, capital has flowed from industrial countries to developing regions like Latin America and parts of Asia. Most countries welcome reentry into international capital markets. However, capital inflows often are 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, and discusses the pros and cons of the policy options .