Capital Flows and Emerging Economies

by Edwards, Sebastian

• ISBN13: 9780226184708
• ISBN10: 0226184706
• Format: Hardcover
• Copyright: 2000-08-01
• Publisher: Univ of Chicago Pr

Summary

The 1990s witnessed several acute currency crises among developing nations that invariably spread to other nearby at-risk countries. These episodes--in Mexico, Thailand, South Korea, Russia, and Brazil--were all exacerbated by speculative foreign investments and high-volume movements of capital in and out of those countries. Insufficient domestic controls and a sluggish international response further undermined these economies, as well as the credibility of external oversight agencies like the International Monetary Fund. This timely volume examines the correlation between volatile capital mobility, currency instability, and the threat of regional contagion, focusing particular attention on the emergent economies of Latin America, Southeast Asia, and Eastern Europe. Together these studies offer a new understanding of the empirical relationship between capital flows, international trade, and economic performance, and also afford key insights into realms of major policy concern.

Author Biography

Sebastian Edwards is the Henry Ford II Professor of International Economics at the Anderson Graduate School of Management, University of California, Los Angeles, and a research associate of the National Bureau of Economic Research.

Table of Contents

Acknowledgments	ix
Introduction Sebastian Edwards	1	(14)
I. Capital Flows to Developing Countries: Theoretical Aspects
Contagion, Globalization, and the Volatility of Capital Flows	15	(1)
Guillermo A. Calvo
Enrique G. Mendoza
Comment
Rudiger Dornbusch
Fire-Sale FDI	43	(1)
Paul Krugman
Comment
Aaron Tornell
Capital Flows to Emerging Markets: Liberalization, Overshooting, and Volatility	61	(1)
Philippe Bacchetta
Eric van Wincoop
Comment
Carmen M. Reinhart
II. Cross-Country Evidence
What Explains Changing Spreads on Emerging Market Debt?	107	(1)
Barry Eichengreen
Ashoka Mody
Comment
Sylvia Maxfield
Is There a Curse of Location? Spatial Determinants of Capital Flows to Emerging Markets	137	(1)
Swati Ghosh
Holger Wolf
Comment
Miguel A. Savastano
Capital Flows and the Behavior of Emerging Market Equity Returns	159	(1)
Geert Bekaert
Campbell R. Harvey
III. Capital Flows to Latin America, Asia, and Eastern Europe
Capital Flows, Real Exchange Rates, and Capital Controls: Some Latin American Experiences	197	(1)
Sebastian Edwards
Comment
Jose De Gregorio
Capital Flows in Asia	255	(1)
Takatoshi Ito
Comment
Dani Rodrik
Capital Flows to Central and Eastern Europe and the Former Soviet Union	299	(341)
Stijn Claessens
Daniel Oks
Rossana Polastri
Comment
Michael P. Dooley
Contributors	341	(2)
Author Index	343	(4)
Subject Index	347