Capital Inflows and Real Exchange Rate Appreciation in Latin America

Capital Inflows and Real Exchange Rate Appreciation in Latin America PDF

Author: Mr.Guillermo Calvo

Publisher: International Monetary Fund

Published: 1992-08-01

Total Pages: 66

ISBN-13: 1451964455

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The characteristics 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, increasing the macroeconomic vulnerability of Latin American economies. Policy options are argued to be limited.

Capital Inflows and Real Exchange Rate Appreciation in Latin America

Capital Inflows and Real Exchange Rate Appreciation in Latin America PDF

Author: Guillermo A. Calvo

Publisher:

Published: 2006

Total Pages: 66

ISBN-13:

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The characteristics 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, increasing the macroeconomic vulnerability of Latin American economies. Policy options are argued to be limited.

Capital Inflows and the Real Exchange Rate

Capital Inflows and the Real Exchange Rate PDF

Author: Mr.Alexander W. Hoffmaister

Publisher: International Monetary Fund

Published: 1996-12-01

Total Pages: 50

ISBN-13: 1451855877

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This paper examines the links between capital inflows and the real exchange rate under pegged exchange rates. The analytical framework is described, and a near-VAR model linking capital inflows, interest rate differentials, government spending, money base velocity, and the temporary component of the real exchange rate (TCRER) is estimated for Korea, Mexico, the Philippines, and Thailand. TCRER movements are associated only weakly with shocks to capital flows. Negative shocks to U.S. interest rates lead to capital inflows in Asia and a TCRER appreciation in the Philippines and Thailand. Positive shocks to government spending have a small but statistically significant effect on the TCRER for Korea.

Capital Flows in Central and Eastern Europe

Capital Flows in Central and Eastern Europe PDF

Author: Ms.Ratna Sahay

Publisher: International Monetary Fund

Published: 1995-06-01

Total Pages: 48

ISBN-13: 1451847742

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This paper examines the nature and composition of capital flows in selected countries in Central and Eastern Europe during 1987–93. The data show that there was a remarkable turnaround in the capital account in 1992–93. This improvement was accompanied by widening current account deficits, an increase in real consumption, and real exchange rate appreciation. In light of these developments, the paper discusses the main macroeconomic concerns raised by capital inflows and lays out the principal policy options relevant for the transition economies.

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