Rethinking Capital Flows for Emerging East Asia
Lowy Institute for International Policy
June 25, 2012
ADBI Working Paper No. 362
Since the 1980s, emerging countries have been urged to welcome foreign capital inflows. The result has often been a pattern of surges, where excessive inflows were followed by damaging 'sudden stops' and reversals. What is needed is a strategy that makes use of the potential benefits of capital 'flowing downhill' (that would require these countries to run current account deficits) while at the same time protecting them from both the excessive inflows and the reversals.
Number of Pages in PDF File: 31
Keywords: Asian financial crisis, East Asia, financial markets, capital flows, current account
JEL Classification: F21, F31, F32
Date posted: June 25, 2012
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