The prospects of expansionary monetary policies in the advanced countries for the foreseeable future have renewed the debate over policy options to cope with large capital inflows that are, at least partly, driven by low interest rates in the financial centers. Historically, capital flow...

From Hume’s discussion of the specie-flow mechanism under the gold standard to the Keynes-Ohlin debate on the transfer problem associated with German reparations after the First World War, understanding the flow of capital across national borders has been central to international economics. My...

During the early 1990s much has been written about the return of foreign private capital to many of the larger Asian and Latin American countries. However, until 1992 there was little evidence that countries in sub-Saharan Africa were participating in this phenomenon. In this paper we use...

With many emerging market currencies tied to the U.S. dollar either implicitly or explicitly, movements in the exchange values of the currencies of major countries have the potential to influence the competitive position of many developing countries. According to some analysts, establishing...

Lucas (1990) argued that it was a paradox that more capital does not flow from rich countries to poor countries. He rejected the standard explanation of expropriation risk and argued that paucity of capital flows to poor countries must instead be rooted in externalities in human capital...

This study examines the impact capital controls had in Malaysia (1998-1999) and Thailand (1997). We aim to assess the extent to which the capital controls were effective in delivering the outcomes that motivated their imposition. We conclude that in Thailand the controls did not deliver much of...

One plausible mechanism through which financial market shocks may propagate across countries is through the effect of past gains and losses on investors' risk aversion. The paper first presents a simple model examining how heterogeneous changes in investors' risk aversion affects portfolio...

For the first time since the onset of the debt crisis in the slimmer or 1982, capital began to return to Latin America during 1990 and 1991.In general, Latin America's re-entry into the international capital markets was perceived as a positive development. However, policy-makers in the region...

This paper describes the current episode of capital inflows to several Asian economies, summarizing the principal facts, the impact of the inflows, and policy options.25 The discussion also covers, when relevant, the similar experiences of Latin American countries, with an emphasis on the policy...

At the time of writing there were widespread concerns about the health of the U.S. economy. There is conclusive evidence that the pace of growth has slowed, which has prompted the Federal Reserve to cut interest rates on two occasions (a total of 100 basis points thus far). As usual, when faced...