Short-Term Capital Flows and Economic Crises

The currency crises that engulfed East Asian economies in 1997 and Mexico in 1994 - and their high development costs - raise a serious concern about the net benefits for developing countries of large flows of potentially reversible short-term international capital. Written by senior policy-makers and academics, the contributions to this volume examine in depth the macroeconomic and other policy dilemmas confronting public authorities in the emerging economies as they deal with short-term capital movements, especially in the period before the outbreak of these crises. The studies are based on comparative case studies of key emerging economies. Valuable insights are also derived from contrasts between the East Asian, Latin American, African, and European experiences, between the financial and real effects of financial flows, and between private and public responsibilities in managing financial markets. The great value of the chapters in this volume is that they analytically identify the weaknesses in both domestic and international capital market regimes. The recommendations derived from this analysis apply to the development of financial markets in developing countries, the monitoring and regulation of mutual funds in source countries, and the future development of international capital markets. They will make an important contribution both to the discussion of national policies and of a new international financial architecture.

Table of contents
  1. Part I: The International and Analytical Context
    1. The Dynamics of Capital Movements to Emerging Economies During the 1990s
    Peter Montiel and Carmen M. Reinhart
  2. Part I: The International and Analytical Context
    2. Short-Term Capital Flows, the Real Economy, and Income Distribution in Developing Countries
    Valpy Fitzgerald
  3. Part I: The International and Analytical Context
    3. The Boom of Portfolio Flows to 'Emerging Markets' and its Regulatory Implications
    Jane W. D’Arista and Stephany Griffith-Jones
  4. Part II: Case Studies
    4. Korea's Management of Capital Flows in the 1990s
    Won-Am Park
  5. Part II: Case Studies
    5. The Southeast Asian Currency Crisis
    Manuel F. Montes
  6. Part II: Case Studies
    6. Capital Inflows and Policy Responses: The Case of Indonesia in the 1990s
    Anwar Nasution
  7. Part II: Case Studies
    7. Causes and Lessons of the Mexican Peso Crisis
    Stephany Griffith-Jones
    More Working Paper | Causes and Lessons of the Mexican Peso Crisis
  8. Part II: Case Studies
    8. Brazil's Macroeconomic Policies and Capital Flows in the 1990s
    Eliana Cardoso
  9. Part II: Case Studies
    9. Managing Capital Inflows in Chile
    Manuel R. Agosin and Ricardo Ffrench-Davis
  10. Part II: Case Studies
    10. Capital Flows and Policy Responses in South Africa in the 1990s
    Brian Kahn
  11. Part II: Case Studies
    11. Crises? What Crises?: Escudo from ECU to EMU
    Jorge Braga de Macedo
  12. Part III: Conclusions
    12. Managing Capital Surges in Emerging Economies
    Stephany Griffith-Jones, Manuel F. Montes and Anwar Nasution
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