CHAPTER 4 Global Liquidity Expansion: Effects on “Receiving” Economies and Policy Response Options
Author: International Monetary Fund. Monetary and Capital Markets Department
Language:
English
Keywords:
GFSR; capital; capital control; control; liquidity; regulator; liquidity-receiving economy; capital transaction; control introduction; inflow control tightening; control cost; International liquidity; Capital flows; Capital outflows; Global

Abstract

The transmission of abundant global liquidity and the accompanying surge in capital flows to economies with comparatively higher interest rates and a stronger growth outlook pose policy challenges as appreciation pressures and rising asset valuations return. In addition to the influence of domestic growth prospects and liquidity conditions, this chapter finds strong links between global liquidity expansion and asset prices, such as equity returns, in the “liquidity-receiving” economies, as well as official reserve accumulation and portfolio inflows.

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Cover Global Financial Stability Report, April 2010
Global Financial Stability Report, April 2010
Meeting New Challenges to Stability and Building a Safer System
Author: International Monetary Fund. Monetary and Capital Markets Department
ISBN:
9781589069169
ISSN:
1729-701X
Publication Date:
20 May 2010
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781589069169.082
Pages:
241