This paper presents an alternative method of testing for financial capital mobility in the absence of forward exchange markets. A model of domestic interest rate determination during liberalization is applied to Korean and Taiwanese data. A variety of diagnostic and recursive tests are used to...

The apparent success of several East Asian countries in sterilizing capital inflows stands in apparent contradiction to the finding of high capital mobility. This paper argues that previous studies examining money market rates may be misplacing their focus, since most lending is mediated through...

Global imbalances are defined. Several explanations for the development of large current account deficits and surpluses in key economies during the period after 1997 are discussed, including the saving-investment approach, the intertemporal approach, mercantilism and the Bretton Woods II...

Required reserves on banks' deposit liabilities have been utilized by both industrial and developing countries to discourage and sterilize international capital flows. In this paper we utilize an open economy macro model incorporating bank credit to evaluate this policy. The model suggests that...