Back Matter
Author:
International Monetary Fund
Search for other papers by International Monetary Fund in
Current site
Google Scholar
Close

Abstract

Developing countries fortunate enough to experience capital inflows haveseen rising levels of investment and enhanced economic growth. Capitalinflows have a negative side, however, in that they tend to appreciatethe domestic currency, making exports less competitive, and to encourageinflation. One defense against these destabilizing effects is to sterilize capital inflows by reducing the domestic component of themonetary base through the various initiatives explained in thispamphlet.

The Economic Issues Series

1. Growth in East Asia: What We Can and What We Cannot Infer. Michael Sarel. 1996.

2. Does the Exchange Rate Regime Matter for Inflation and Growth? Atish R. Ghosh, Anne-Marie Gulde, Jonathan D. Ostry, and Holger Wolf. 1996.

3. Confronting Budget Deficits. 1996.

4. Fiscal Reforms That Work. C. John McDermott and Robert F. Wescott. 1996.

5. Transformations to Open Market Operations: Developing Economies and Emerging Markets. Stephen H. Axilrod. 1996.

6. Why Worry About Corruption? Paolo Mauro. 1997.

7. Sterilizing Capital Inflows. Jang-Yung Lee. 1997.

Jang-Yung Lee received his Ph.D. in Economics from New York University. He wrote this paper while he was an economist in the IMF’s Monetary and Exchange Affairs Department. Mr. Lee is now with the Korean Development Institute.

  • Collapse
  • Expand