From 2000 to 2007, Estonia was one of the fastest growing emerging market economies. A housing boom, fuelled by capital inflows and credit, resulted in skyrocketing house prices and an over-expanded construction sector. However, the currency board limited the Bank of Estonia’s ability to curb...

The paper reviews India’s macroeconomic performance and policies since 2000. The first section briefly summarizes key macroeconomic developments regarding economic growth, inflation, external balance, the fiscal situation and aggregate savings and investment. The second section considers...

This paper analyzes the impact of terms of trade and risk-premium shocks on a small open economy in an intertemporal, Dutch disease model, with international capital mobility. It is shown that when the economy experiences a permanent improvement in the terms of trade, the Dutch disease effect...

This paper investigates the question of whether capital inflows, particularly Foreign Direct Investment (FDI), cause the real exchange rate to appreciate. It also examines whether different forms of captial inflow have variable effects on the real exchange rate. The paper estimates an empirical...

Concerns that a rapid surge in capital inflow leads to loss of autonomy in macroeconomic policy, and that its reversal has significant negative effects on an economy, have motivated capital controls during the 1990s. Under a fixed exchange rate system without capital-account restrictions, a...

This paper reviews financial stability challenges in the EU candidate countries Croatia, Turkey and the former Yugoslav Republic of Macedonia. It examines the fi nancial sectors in these three economies, which, while at very different stages of development and embedded in quite diverse economic...

Despite of the multitude of advantages provoked by foreign capital for the developing countries, and namely as a result of foreign investments’ efficient implementation in real sector of national economy, international practice of many countries from the last years, emphasizes a very stringent...

This technical note examines investment opportunities for pension funds in Kazakhstan. It puts forward policy alternatives that could lead to improved management of pension fund assets in Kazakhstan. The note emphasizes prudence in the management of pension assets, given the social and fiscal...