This paper studies the proposition that capital inflows tend to take the form of FDI--i. e. , the share of FDI in total liabilities tends to be higher--in countries that are safer, more promising and with better institutions and policies. It finds that this view is patently wrong since it stands...

It has been common to attribute financial crises to short-term capital inflows, while foreign direct investment (FDI) is seen as a safer form of finance. The relationship between crises and the composition of capital flows is particularly relevant at present because the flow of capital to Latin...

This paper discusses the economic performance of Latin America in the last decade, paying special attention to growth and the financial sector. In particular, it shows that external factors, such as like U. S. interest rates and the business cycle, play a key role in capital inflows, investment,...

The value of equity market transactions in emerging economies soared from about 2 percent of the world total in 1986 to 12 percent in 1996. This boom was accompanied by an explosion of international capital flows, especially flows into developing country stock markets. Moreover, while equity...

This paper analyses macroeconomic aspects of exit from aid-dependence. By 'exit from aid', we mean substantial and enduring decline over time in Official Development Assistance (ODA) as a share of Gross Domestic Product (GDP). The relevant macroeconomic variables are identified by systematically...

Will capital inflows boom again in Latin America as countries recover from the 1998-99 recession? And will they bust again shortly thereafter, repeating the cycle of the past? Is there something fundamentally different about the new wave of capital inflows to alter this historical pattern, a sea...

We examine episodes of large gross FDI inflows - surges - at the sectoral level between 1994 and 2009 for 95 emerging-market and industrial countries. We find that surges in the primary and manufacturing sectors are less cyclical and associated with lower macroeconomic volatility than surges in...

This article investigates the effects of macroeconomic policy (monetary and fiscal) on output growth during financial crises characterized by a sudden stop" in net capital inflows in developing and emerging market economies. We investigate 83 sudden stop crises in 77 countries over 1982-2003...

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...