The policy responses to capital flows in emerging markets are multiple. However, capital inflow controls, if applied sufficiently broadly, can buttress all other policies by limiting the volume of capital inflows and address balance sheet vulnerabilities. The study analyzes the effects of...

This study investigated the directional linkages among net foreign portfolio investment volatility, financial deepening and capital market performance in low-income Southern African Development Community (SADC) countries employing a dynamic panel vector error correction model (P-VECM) on...

In this paper, we first document the growing importance of foreign-domiciled investment funds in countries' portfolio liabilities over time and then show empirical evidence that cross-border fund flows are coincident with asset price movements. To measure the external liabilities of countries to...

The US financial crisis and the later Eurozone crisis have substantially affected capital flows into and out of financial centers like Switzerland. We focus on the pattern of capital flows involving the Swiss banking industry. We first rely on balance-of-payment statistics and show that net...

In response to questions about the relative importance of different types of capital flow for international competitiveness, we develop a structural vector auto-regressive model of the real exchange rate and international capital flows. We reveal that innovations to speculative sentiment cause...

The approach of India’s political establishment toward economic reforms and economic policy-making may have undergone major changes in the last few decades, but its terms of engagement with international financial institutions, particularly with the International Monetary Fund (IMF),...

This paper develops a dynamic two-country neoclassical stochastic growth model with incomplete markets. Short-term credit flows can be excessive and reverse suddenly. The equilibrium outcome is constrained inefficient due to pecuniary externalities. First, an undercapitalized country borrows too...

This paper studies the international transmission of pledgeability shocks, as the recent crisis involved a negative shock to the pledgeability of assets. The paper develops a two-country portfolio model, with leveraged investors, that incorporates this type of shock and a solution approach for...

During the financial crisis, the global economy experienced a collapse in cross-border capital flows and a rapid adjustment of global imbalances. One of the striking features of this adjustment is its asymmetric nature:domestic demand declined in countries with a current account deficit,but only...

The annual growth rate of the euro area monetary aggregate M3 fell to 1.0% in 2013 from 3.5% in 2012. The French component of M3 also slowed, slipping from 2.4% in 2012 to 0.9% in 2013. The growth of loans to households and non-financial corporations was stronger in France than in the euro area...