Too Much, Too Little, or Too Volatile? International Capital Flows to Developing Countries in the 1990s

29 Pages Posted: 1 Dec 2017

Date Written: June 30, 2001

Abstract

Developing countries are constrained in financing current account deficits as real capital mobility is still far from perfect. At the same time, capital flows to these countries proved to be extremely volatile. The paper argues that the long-term problem of "too little" should not be confused with the short-term problem of "too volatile". The former is related to sovereign risk, which may be difficult to overcome. The latter could be kept within limits by financial restructuring towards relatively stable types of capital flows.

Keywords: International Capital Markets, Developing Countries, Debt, Equity Investment, Sovereign Risk, Volatility

JEL Classification: F31, F32

Suggested Citation

Nunnenkamp, Peter, Too Much, Too Little, or Too Volatile? International Capital Flows to Developing Countries in the 1990s (June 30, 2001). East Asian Economic Review, Vol. 5, No. 1, pp. 119-147, June 2001. Available at SSRN: https://ssrn.com/abstract=3079331 or http://dx.doi.org/10.2139/ssrn.3079331

Peter Nunnenkamp (Contact Author)

University of Kiel ( email )

D-24100 Kiel
Germany

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