Capital inflows: Macroeconomic implications and policy responses

Capital regulation and macroeconomic activity: Implications for macroprudential policy

This paper studies the macroeconomic effect of changes in the capital requirements set by microprudential bank regulators. The central result is that unanticipated increases in capital requirements lower lending to firms and households, reduce aggregate expenditure and raise credit spreads. A financial accelerator effect is found to amplify the macroeconomic responses to shifts in bank credit s...

RMB Revaluation and Speculative Capital Inflows: Policy Options

We build a monetary model to show how expected revaluations lead to the instability of a pegged exchange rate regime. This model assumes current account convertibility and some degree of capital control, and fundamentally sound domestic policies and economy, as is the case in China. The model demonstrates that market-oriented interest rates can act as an automatic stabilizer to ease revaluation...

The macroeconomic effects of debt- and equity-based capital inflows ¬リニ

This paper considers whether debt-based capital inflows have different effects onmany shortrun macroeconomic indicators than equity-based capital inflows. Using external instruments in a structural VAR for identification, we estimate the response of domestic variables like the output gap, inflation, the exchange rate, stock prices, credit growth, and interest rates to an exogenous shock to debt...

Capital inflows , policy responses , and their ill consequences : Thailand , Malaysia , and Indonesia in the decade before the crises

Capital inflows, especially when volatile, denominated in foreign currencies and not properly hedged against exchange rate risks, may pose macroeconomic and financial problems in the recipient economy. In this paper we analyze the mechanisms through which those problems arise; and we assess the policies that national authorities may resort to in order to prevent them, under the assumption that ...

Capital inflows and investment in developing countries