Determinants and Repercussions of the Composition of Capital Inflows

50 Pages Posted: 31 Jan 2006

See all articles by Mark A. Carlson

Mark A. Carlson

Board of Governors of the Federal Reserve System

Leonardo Hernández

Banco Central de Chile

Multiple version iconThere are 2 versions of this paper

Date Written: May 2002

Abstract

The Mexican, Asian, and Russian crises of the mid- and late 1990s have renewed interest among policymakers in the determinants and effects of private capital inflows. This paper analyzes whether policies can affect the composition of capital inflows and whether different compositions aggravate crises. The results support the view that, while fundamentals matter, capital controls can affect the mix of capital inflows that countries receive. The results also show that during the Asian crisis, countries with more yen-denominated debt faired worse, while during the Mexican crisis larger short-term debt stocks increased the severity of the crisis.

Keywords: capital flows crisis contagion

JEL Classification: F30 F40 G15

Suggested Citation

Carlson, Mark A. and Hernández, Leonardo, Determinants and Repercussions of the Composition of Capital Inflows (May 2002). Available at SSRN: https://ssrn.com/abstract=879621 or http://dx.doi.org/10.2139/ssrn.879621

Mark A. Carlson (Contact Author)

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Leonardo Hernández

Banco Central de Chile ( email )

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