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Rethinking Capital Flows for Emerging East Asia

31 Pages Posted: 25 Jun 2012  

Stephen Grenville

Lowy Institute for International Policy

Date Written: June 25, 2012

Abstract

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.

Keywords: Asian financial crisis, East Asia, financial markets, capital flows, current account

JEL Classification: F21, F31, F32

Suggested Citation

Grenville, Stephen, Rethinking Capital Flows for Emerging East Asia (June 25, 2012). ADBI Working Paper No. 362. Available at SSRN: https://ssrn.com/abstract=2090734 or http://dx.doi.org/10.2139/ssrn.2090734

Stephen Grenville (Contact Author)

Lowy Institute for International Policy ( email )

31 Bligh Street
Sydney, NSW
Australia

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