Cover IMF Working Papers
International Capital Crunches: The Time-Varying Role of Informational Asymmetries
Author:
Mr. Ashoka Modynull

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and
Mr. Mark P. Taylornull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2002: Issue 043
Language:
English
Publication Date:
01 Feb 2002
DOI:
https://doi.org/10.5089/9781451846331.001
ISBN:
9781451846331
ISSN:
1018-5941
Pages:
26
Keywords:
WP; capital flow; capital; supply and demand; capital crunch; Capital flows; disequilibrium; rationing; asymmetric information; demand and supply; short-term debt; supply and demand function; supply and demand demand curve; Emerging and frontier financial markets; Credit; Stock markets; Imports; East Asia; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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We examine the determinants of capital flows to four developing countries during the 1990s using an explicitly disequilibrium econometric framework in which the supply and demand for capital are not necessarily equal and the actual amount of the flow is determined by the ‘short side’ of the market. We are thus able to detect instances of ‘international capital crunch’—where capital flows are curtailed because of supply-side rationing—and to relate these instances to movements in the underlying fundamentals. The analysis highlights the role of asymmetric information—as distinct from the traditional concern with default risk—in conditioning capital flows.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2002: Issue 043