The performance of a reserve requirement rule combined with foreign exchange intervention under the capital outflow shock is studied in a dynamic stochastic model of a small open economy. The model features a two-pillar toolkit of the monetary and macroprudential policies involving a hybrid...

This paper is a theoretical investigation of international lending andborrowing in the context of a general equilibrium model in which nationalproductivities are subject to random fluctuations and rates of timepreference differ among countries. International capital flows arise fromthe efforts...

This paper examines whether IMF lending is associated with increases in outflows to offshore financial centers (OFCs), known for bank secrecy and asset protection, relative to other international destinations. Using quarterly data from the BIS on bilateral bank deposits, we are unable to detect...

Why did international capital flows rise to such heights in the late 19th century, the years between 1907 and 1913 in particular? Britain placed half of her annual savings abroad during those seven years, and 76 percent of it went to the New World countries of Canada, Australia, the USA,...

A decade has passed since Robert Lucas asked why capital does not flow from rich to poor countries. Lucas used a contemporary example to illustrate his Paradox, the very modest flow of capital from the United States to India during the second great global capital market boom, after 1970. Had he...

Few sovereign debtors have repudiated their obligations entirely. But despite the significant sanctions at the disposal of lenders, many borrowers have been able to consistently negotiate for reduced repayments. This paper presents a model of the on-going bargaining process that determines...

Over the past century, the world economy has passed through a succession of phases characterized by very different levels of international capital flows. This paper asks what accounts for these dramatic shifts in the extent of capital movements across national borders, Three categories of...