Financing pension systems necessitates that actual output is redistributed from workers and entrepreneurs actually in activity in favour of retirees. Therefore, in a closed economy, the return on accrued pension funds, to be distributed to pensioners, is ceiled by the real growth of income,...

Central Bank participants at the BIS 2008 Open Economies Meeting in Punta del Este, Uruguay, discussed trends in capital flows since 2003 and their monetary and financial stability implications. Capital flows appear to be more benign today than in the past, partly because of a greater share of...

There is no consensus in the empirical literature on the direction in which U.S. monetary policy affects cross-border bank lending. We find robust evidence that the impact of the U.S. federal funds rate on cross-border bank lending in a given period depends on the prevailing international...

This paper explores how global financial conditions influence corporate leverage growth. Using a sample of 800,000 listed and non-listed firms across 28 emerging markets (EMs), we find that accommodative global financial conditions—initially proxied with a measure of U.S. monetary policy—are...

While the initial certainty and stark simplicity of the Impossible Trinity have fuzzed and softened over time, this idea still holds a powerful sway over analysis of exchange rates and in the policy debate on capital flows. Yet the practical evidence suggests that the constraints on policy...

Governors and senior officials representing some two dozen central banks from Africa and other regions of the world met at the BIS in May 2011 to discuss the monetary policy and financial stability issues facing Africa after the global financial crisis. This volume brings together the background...

This paper assesses the effect of tight monetary policy on economic performance under different levels of capital flows. Empirical evidence from Turkey between 1990 and 2013 suggests that tight monetary policy measured with a positive innovation on interest rate appreciates the Turkish Lira (TL)...

The Impossible Trinity doctrine still holds a powerful sway over policymakers, advisors (particularly the International Monetary Fund [IMF]) and academia. In East Asia over the past decade, however, most countries have been able to maintain open capital markets, monetary policy independence, and...

Sudden capital outflows were at the heart of the 1997-98 Asian crisis. Ten years later, capital flows are back on the policy agenda, but in a very different context. The countries of East Asia are now getting more inflows than they can effectively absorb and the upward pressure on exchange rates...

Large and persistent capital inflows can be a double-edged sword. Accompanying its many attractions is the tendency to display a boom and bust pattern (volatility and reversals) in addition to the possibility of causing rapid exchange rate appreciation, inflation and loss of monetary policy...