Multilateral Aspects of Managing the Capital Account (EPub)

Business & Finance, Economics, Money & Monetary Policy, Macroeconomics
Cover of the book Multilateral Aspects of Managing the Capital Account (EPub) by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek, INTERNATIONAL MONETARY FUND
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek ISBN: 9781475596359
Publisher: INTERNATIONAL MONETARY FUND Publication: September 7, 2012
Imprint: INTERNATIONAL MONETARY FUND Language: English
Author: Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
ISBN: 9781475596359
Publisher: INTERNATIONAL MONETARY FUND
Publication: September 7, 2012
Imprint: INTERNATIONAL MONETARY FUND
Language: English
The financial crisis has again brought home the profound financial linkages across countries, often manifest in highly volatile capital flows. This volatility has prompted interest in possible rules of the road to guide policies in both source and recipient countries. This note discusses the analytical underpinnings, and possible contours, of such rules. While a series of discussion notes have investigated how an individual country might respond to surging inflows, less attention has been paid to the multilateral consequences of country policies, and the desirability of international cooperation to achieve globally efficient outcomes. We argue that the global welfare implications of capital account regulations, or policies that mimic the effects of such regulations, are threefold. First, spillovers from such policies do not necessarily have normative implications: if policies are justified from a national standpoint (in terms of reducing domestic distortions), under a range of conditions they should be pursued even if they give rise to cross-border spillovers. Second, however, if policies in one country exacerbate existing distortions in other countries, and it is costly for other countries to respond, then multilateral restrictions on unilateral policies are likely to be beneficial. Third, coordination may require borrowers to reduce inflow controls or, much thornier, agreement by source countries to partially internalize risks from excessively large or risky outflows. While it is very difficult to fully spell out desirable rules of the road in practice, multilateral oversight should carefully consider situations where capital account regulations seem unjustified from a prudential standpoint and seem instead geared toward vitiating external adjustment—e.g., when inflow controls are used to sustain an undervalued currency. Oversight might also raise red flags in situations where policies are excessively deflecting flows across recipient countries or transmitting risk from source to recipient countries. The discussion note fleshes out the analytical considerations behind such rules.
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
The financial crisis has again brought home the profound financial linkages across countries, often manifest in highly volatile capital flows. This volatility has prompted interest in possible rules of the road to guide policies in both source and recipient countries. This note discusses the analytical underpinnings, and possible contours, of such rules. While a series of discussion notes have investigated how an individual country might respond to surging inflows, less attention has been paid to the multilateral consequences of country policies, and the desirability of international cooperation to achieve globally efficient outcomes. We argue that the global welfare implications of capital account regulations, or policies that mimic the effects of such regulations, are threefold. First, spillovers from such policies do not necessarily have normative implications: if policies are justified from a national standpoint (in terms of reducing domestic distortions), under a range of conditions they should be pursued even if they give rise to cross-border spillovers. Second, however, if policies in one country exacerbate existing distortions in other countries, and it is costly for other countries to respond, then multilateral restrictions on unilateral policies are likely to be beneficial. Third, coordination may require borrowers to reduce inflow controls or, much thornier, agreement by source countries to partially internalize risks from excessively large or risky outflows. While it is very difficult to fully spell out desirable rules of the road in practice, multilateral oversight should carefully consider situations where capital account regulations seem unjustified from a prudential standpoint and seem instead geared toward vitiating external adjustment—e.g., when inflow controls are used to sustain an undervalued currency. Oversight might also raise red flags in situations where policies are excessively deflecting flows across recipient countries or transmitting risk from source to recipient countries. The discussion note fleshes out the analytical considerations behind such rules.

More books from INTERNATIONAL MONETARY FUND

Cover of the book Direct Reporting of Private Sector Cross-Border Financial Flows and Stocks in Selected African Countries by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Trade Policy Developments in Industrial Countries by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Large-Scale Post-Crisis Corporate Sector Restructuring by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Interest Rate Policies in Developing Countries by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Currency Boards: Issues and Experiences by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Exchange Rate Analysis in Support of IMF Surveillance: A Collection of Empirical Studies by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Anchoring Growth: The Importance of Productivity-Enhancing Reforms in Emerging Market and Developing Economies by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Saving Behavior and the Asset Price "Bubble" in Japan: Analytical Studies by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Unwinding Financial Sector Interventions: Preconditions and Practical Considerations by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Finance & Development, June 1994 by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Protection and Liberalization: A Review of Analytical Issues by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book ISORA 2016 by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Finance & Develoment, June 2007 by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Fiscal Management of Scaled-Up Aid by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
Cover of the book Modernizing China's Growth Paradigm by Jonathan Mr. Ostry, Atish Mr. Ghosh, Anton Mr. Korinek
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy