Developing countries fortunate enough to experience capital inflows haveseen rising levels of investment and enhanced economic growth. Capitalinflows have a negative side, however, in that they tend to appreciatethe domestic currency, making exports less competitive, and to encourageinflation....

This paper extends the basic monetary model that underlies the monetary approach to the balance of payments to allow for the endogenous determination of the short-run growth rate of the economy. In the extended model domestic credit expansion affects not only the balance of payments but also the...

Capital flows can deliver substantial benefits for countries, but also have the potential to contribute to a buildup of systemic financial risk. Benefits, such as enhanced investment and consumption smoothing, tend to be greater for countries whose financial and institutional development enables...

This paper analyzes reasons for the high post-war correlations of saving and investment, both across countries and over time. It is concluded that the main reason for the observed high correlations over the recent period is probably government policy

This year's capital markets report provides a comprehensive survey of recent developments and trends in the advanced and emerging capital markets, focusing on financial market behavior during the Asian crisis, policy lessons for dealing with volatility in capital flows, banking sector...

Assiduously tracking the trends and consequences of globalization, the IMF's quarterly magazine Finance & Development has been a major forum for discussing-and dissecting-the policy options and challenges faced by governments in an era when many national decisions transcend borders. This...

A small macroeconomic model based on familiar theoretical considerations is developed and estimated using data from 31 developing countries. Efficient estimation techniques are used to control for country heterogeneity under the assumption of rational expectations. The estimates and the test...

This paper provides a description and analysis of recent developments in international capital markets and an assessment of the prospects for private financing flows. It focuses particularly on recent trends in liberalization and innovation in international financial markets, including relevant...