Capital Flows, Output Volatility, and Financial Crises in Emerging Markets
نویسنده
چکیده
The surge in capital flows towards emerging market countries is one of the major developments in the world economy in the 1990s. In particular, short-term flows, in the form of portfolio investments or bank loans, have grown at an extremely rapid pace. At the same time, emerging markets have experienced an increasing number of financial crises, with dire consequences. It is increasingly argued that the liberalization of capital flows that occurred in several countries has been excessive and is in part responsible for the crises. Consequently, the liberalization of capital flows is no longer a priority in many countries and capital controls are often advocated.
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