The Capital Inflows Problem

Download or read book The Capital Inflows Problem written by Guillermo A. Calvo and published by International Monetary Fund. This book was released on 1993-08 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since 1990 capital has started to move from industrial countries to developing regions like Latin America, the Middle East 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 a menu of policy options are discussed.