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Composition of Capital Flows : A Survey
Kirabaeva, Koralai - 2010
We survey several mechanisms that explain the composition of international capital flows: foreign direct investment, foreign portfolio investment and debt flows (bank loans and bonds). We focus on information frictions such as adverse selection and moral hazard, and exposure to liquidity shocks,...
Persistent link: https://www.econbiz.de/10013136735
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Foreign Capital and Economic Growth
Prasad, Eswar S. - 2010
We document the recent phenomenon of quot;uphillquot; flows of capital from nonindustrial to industrial countries and analyze whether this pattern of capital flows has hurt growth in nonindustrial economies that export capital. Surprisingly, we find that there is a positive correlation between...
Persistent link: https://www.econbiz.de/10012759675
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Capital Flows : Catalyst or Hindrance to Economic Takeoffs?
Aizenman, Joshua - 2011
This paper applies a probit estimation to assess the relationship between economic takeoffs during 1950-2000 and inflows of portfolio debt, portfolio equity, and FDI, controlling for country's stock of short-term external debt and commodity terms of trade. Average level of FDI inflows is...
Persistent link: https://www.econbiz.de/10013122019
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FDI Contribution to Capital Flows and Investment in Capacity
Razin, Assaf - 2010
The paper surveys a theory of FDI, which captures a unique feature: hands-on management standards, that enable …, with large rates of returns), than the domestic investors. The theory can explain both two-way FDI flows among developed … informational value of FDI. The predictions of the theory are consistent with evidence from panel data: larger FDI coefficients in …
Persistent link: https://www.econbiz.de/10012762983
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Foreign Capital in Latin America in the Nineteenth and Twentieth Centuries
Taylor, Alan M. - 2021
This paper examines the history of foreign investment in Latin America in the two centuries since independence. Investment flows to the region were sometimes large and always volatile. Symptoms of overborrowing, sudden stops, debt, default and crises have been evident from the beginning. In...
Persistent link: https://www.econbiz.de/10013243417
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Tax Principles and Capital Inflows : Is it Efficient to Tax Nonresident Income?
Razin, Assaf; Sadka, Efraim; Yuen, Chi-Wa - 2021
Even though financial markets today show a high degree of integration, the world capital market is still far from the textbook story of high capital mobility. The failure to have a tax scheme in which the rate of returns across countries are equated can result in inefficient capital flows across...
Persistent link: https://www.econbiz.de/10013218317
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When it Rains, it Pours : Procyclical Capital Flows and Macroeconomic Policies
Kaminsky, Graciela; Reinhart, Carmen M.; Vegh, Carlos A. - 2021
Based on a sample of 104 countries, we document four key stylized facts regarding the interaction between capital flows, fiscal policy, and monetary policy. First, net capital inflows are procyclical (i.e., external borrowing increases in good times and falls in bad times) in most OECD and...
Persistent link: https://www.econbiz.de/10013223342
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Inflation Targeting and Sudden Stops
Caballero, Ricardo J.; Krishnamurthy, Arvind - 2021
Emerging economies experience sudden stops in capital inflows. As we have argued in Caballero and Krishnamurthy (2002), having access to monetary policy during these sudden stops is useful, but mostly for insurance' rather than for aggregate demand reasons. In this environment, a central bank...
Persistent link: https://www.econbiz.de/10013237236
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A Model of Crises in Emerging Markets
Dooley, Michael P. - 2021
First generation models of speculative attacks show that apparently random speculative attacks on policy regimes can be fully consistent with rational and well-informed speculative behavior. Unfortunately, models driven by a conflict between exchange rate policy and other macroeconomic...
Persistent link: https://www.econbiz.de/10013238941
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Excessive Volatility in Capital Flows : A Pigouvian Taxation Approach
Jeanne, Olivier - 2010
This paper analyzes prudential controls on capital flows to emerging markets from the perspective of a Pigouvian tax that addresses externalities associated with the deleveraging cycle. It presents a model in which restricting capital inflows during boom times reduces the potential outflows...
Persistent link: https://www.econbiz.de/10013144505