Capital Inflows and the Real Exchange Rate : Can Financial Development Cure the Dutch Disease? /

This paper argues that, in improving the efficient allocation of resources, financial sector development could dampen the appreciation effect of capital inflows. Using dynamic panel data techniques, the paper finds that the exchange rate appreciation effect of FDI inflows is indeed attenuated when f...

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Tác giả chính: Saborowski, Christian
Định dạng: Tạp chí
Ngôn ngữ:English
Được phát hành: Washington, D.C. : International Monetary Fund, 2009.
Loạt:IMF Working Papers; Working Paper ; No. 2009/020
Truy cập trực tuyến:Full text available on IMF
Miêu tả
Tóm tắt:This paper argues that, in improving the efficient allocation of resources, financial sector development could dampen the appreciation effect of capital inflows. Using dynamic panel data techniques, the paper finds that the exchange rate appreciation effect of FDI inflows is indeed attenuated when financial and capital markets are larger and more active. The main implication of these results is that one of the main dangers associated with large capital inflows in emerging markets-the destabilization of macroeconomic management due to a sizeable appreciation of the real exchange rate-can be mitigated partly by developing a deep financial sector.
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Mô tả vật lý:1 online resource (42 pages)
Định dạng:Mode of access: Internet
số ISSN:1018-5941
Truy cập:Electronic access restricted to authorized BRAC University faculty, staff and students