Cover IMF Policy Discussion Papers
Capital Inflows and Balance of Payments Pressures: Tailoring Policy Responses in Emerging Market Economies
Author:
Mr. Bikas Joshi
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Ms. Manuela Goretti
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Ms. Uma Ramakrishnan
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Mr. Alun H. Thomas
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Mr. Atish R. Ghosh
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Mr. Juan Zalduendonull

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Series:
IMF Policy Discussion Papers
Volume/Issue:
Volume 2008: Issue 002
Language:
English
Publication Date:
01 Jun 2008
DOI:
https://doi.org/10.5089/9781451945997.003
ISBN:
9781451945997
ISSN:
1564-5193
Pages:
21
Keywords:
PDP; BOP pressure; balance of payments; exchange rate; fiscal policy; appreciation; current account; surplus; capital flows; policy responses; exchange rate appreciation; appreciation pressure; financing Needs; fiscal policy measure; Capital inflows; Current account surpluses; Current account deficits; Current account balance; Global; Middle East; East Asia
Legal-disclaimer:
This Policy Discussion Paper should not be reported as representing the views of the IMF. The views expressed in this Policy Discussion Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Policy Discussion Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.
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Although capital inflows are generally beneficial to recipient countries, they also pose a challenge for the conduct of economic policy. This paper proposes a conceptual taxonomy to guide the design of policy responses in the face of capital flows. We explore how responses to capital surges should be differentiated based on the source of balance of payments pressures. We also examine whether the policy choices in emerging market countries conform to the taxonomy's predictions and find some correspondence, especially during periods of high global liquidity.
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Cover IMF Policy Discussion Papers
IMF Policy Discussion Papers
ISSN:
1564-5193
Publisher:
International Monetary Fund
Volume 2008: Issue 002