Capital Inflows and the Real Exchange Rate.
This paper argues that, in improving the efficient allocation of resources, financial sector development could dampen the appreciation effect of capital inflows. Using dynamic panel data techniques, the paper finds that the exchange rate appreciation effect of FDI inflows is indeed attenuated when f...
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| Online Access: |
Full Text (via ProQuest) |
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| Main Author: | |
| Format: | eBook |
| Language: | English |
| Published: |
Washington :
International Monetary Fund,
2009.
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| Series: | IMF working paper (Online)
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| Summary: | This paper argues that, in improving the efficient allocation of resources, financial sector development could dampen the appreciation effect of capital inflows. Using dynamic panel data techniques, the paper finds that the exchange rate appreciation effect of FDI inflows is indeed attenuated when financial and capital markets are larger and more active. The main implication of these results is that one of the main dangers associated with large capital inflows in emerging markets-the destabilization of macroeconomic management due to a sizeable appreciation of the real exchange rate-can be mit. |
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| Physical Description: | 1 online resource (44 pages) |
| ISBN: | 9781451916034 1451916035 |
| Source of Description, Etc. Note: | Print version record. |