Liberalizing Capital Flows and Managing Outflows - Background Paper

Liberalizing Capital Flows and Managing Outflows - Background Paper
Author :
Publisher : International Monetary Fund
Total Pages : 60
Release :
ISBN-10 : 9781498340847
ISBN-13 : 1498340849
Rating : 4/5 (849 Downloads)

Book Synopsis Liberalizing Capital Flows and Managing Outflows - Background Paper by : International Monetary Fund. Monetary and Capital Markets Department

Download or read book Liberalizing Capital Flows and Managing Outflows - Background Paper written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2012-03-14 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: Liberalization of capital flows can benefit both source and recipient countries by improving resource allocation, reducing financing costs, increasing competition and accelerating the development of domestic financial systems. The empirical evidence, however, is mixed on the benefits, and it suggests that countries benefit most when they meet certain thresholds related to institutional and financial development. The principal cost of capital flow liberalization stems from the economic instability brought on by volatile capital flows. In extreme cases, sudden stops or reversals in capital inflows can trigger financial crises followed by prolonged periods of weak growth.


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