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Capital Inflows (capital + inflow)
Selected AbstractsCapital Inflows, Resource Reallocation and the Real Exchange Rate,INTERNATIONAL FINANCE, Issue 2 2008Emmanuel K. K. Lartey A large capital inflow to a developing economy can potentially cause a real exchange rate appreciation that is detrimental to the prospects of its tradable sector; a phenomenon known as the Dutch Disease. I analyse the effects of both the level and share of capital inflow on resource reallocation and real exchange rate movements in a small open economy. I find that there exists a trade-off between resource reallocation and the degree of real exchange rate appreciation. In particular, the less labour the tradable sector loses to the non-tradable sector, the greater is the real exchange rate appreciation. This result is driven by the share of investment accounted for by foreign capital, and suggests that an emerging market economy that adopts a production technique which utilizes a greater share of foreign capital relative to domestic capital will be more susceptible to the Dutch Disease following an increase in capital inflow. The results also imply that a policy designed to minimize real exchange rate appreciation during capital inflow episodes should encompass measures aimed at stabilizing prices of non-tradables. [source] Has International Trade in Saving Improved US Economic Welfare?THE ECONOMIC RECORD, Issue 2009ANTHONY J. MAKIN Over the past decade international policy-makers have perceived the current account deficit of the world's largest foreign borrower economy, the United States, as a threat to global economic and financial stability. Yet, by bridging the US domestic saving-investment gap, capital inflow that matched the huge US current account deficit also enabled a faster rate of domestic capital accumulation than home saving alone would have permitted. Consistent with the theory of international capital movements, this study identifies and compares the respective contributions of domestic and foreign saving to US gross domestic product per worker over the two decades prior to the onset of the US banking crisis. By revealing that foreign borrowing contributed significantly to raising US output and hence living standards over this period, it adds a new dimension to the debate about global imbalances. [source] Geographical Aspects of Food Industry FDI in the CEE Countries Geografische Aspekte ausländischer Direktinvestitionen (ADI) in der Lebensmittelindustrie in mittel- und osteuropäischen Ländern Les dimensions géographiques de l'IDE dans l'industrie alimentaire des pays d'Europe centrale et orientaleEUROCHOICES, Issue 1 2009Csaba Jansik Summary Geographical Aspects of Food Industry FDI in the CEE Countries Food industry FDI has favoured certain food processing sub-sectors over others and it has also been distributed rather unevenly in geographical terms both between countries and regionally within each country. As for the regional distribution, foreign investors have typically targeted locations with a relatively high density of consumers as opposed for instance to prioritising the proximity of agricultural raw materials. The capital city areas and their surrounding regions have attracted a much higher proportion of total food industry FDI than their contribution to agricultural and food processing output would warrant. FDI has contributed in many ways to the development of the regions and industries which have received capital inflows. There has been some levelling off in FDI between countries more recently, a trend driven by the tendency for multinational enterprises to shift their production capacity across national borders among their CEE subsidiaries in a search for greater economies of scale or cost savings. This realignment has helped certain branches of the food industry in some CEE countries perform better than others in competing for common EU food markets. Positive effects of the recent FDI inflows include rapid productivity improvements and enhancement of food export volumes. L'IDE dans l'industrie alimentaire a privilégié certains sous-secteurs de la transformation alimentaire plutôt que d'autres et sa répartition géographique, à la fois entre pays et entre régions au sein d'un même pays, a été plutôt inégale. En termes de répartition régionale, les investisseurs étrangers ont typiquement ciblé des zones où la densité des consommateurs est assez élevée plutôt que de donner, par exemple, la prioritéà la proximité des produits agricoles primaires. Les capitales et les régions qui les entourent ont attiré une proportion bien plus grande de l'ensemble de l'IDE dans l'industrie alimentaire que ce que leur contribution à la production agricole et alimentaire représenterait. L'IDE a contribué de maintes façons au développement des régions et des industries qui ont reçu des capitaux. Une certaine égalisation de l'IDE s'est produite plus récemment entre pays, ce phénomène étant entraîné par la tendance des entreprises multinationales à transférer leur capacité de production d'un pays à l'autre entre leurs filiales d'Europe centrale et orientale, à la recherche d'économies d'échelle et de coûts. Ce rééquilibrage a aidé certaines branches de l'industrie alimentaire de certains pays d'Europe centrale et orientale à réussir mieux que d'autres dans la compétition sur les marchés alimentaires de l'UE. Parmi les effets positifs des entrées de capitaux d'IDE récentes, figurent des améliorations rapides de la productivité et la croissance en volume des exportations de produits alimentaires. Ausländische Direktinvestitionen (ADI) in der Lebensmittelindustrie haben sich auf bestimmte Teilsektoren konzentriert. Außerdem ist die Konzentration der ADI sowohl geografisch zwischen den Ländern als auch den Regionen einzelner Länder ungleich. Bei der regionalen Konzentration haben die ausländischen Investoren ihre Wahl nicht etwa anhand der Entfernung zu landwirtschaftlichen Rohstoffen getroffen, sondern Orte mit einer relativ hohen Kundendichte bevorzugt. Auf die Hauptstadtregionen entfiel ein viel größerer Anteil an den gesamten ADI als es ihre Beteiligung an der Produktionsmenge in Landwirtschaft und Lebensmittelverarbeitung rechtfertigen würde. ADI haben in vielerlei Hinsicht zur Entwicklung der Regionen und Industrien beigetragen, die einen Kapitalzufluss erfahren haben. In letzter Zeit wurden ADI zwischen den Ländern etwas weniger konzentriert, da multinationale Unternehmen danach streben, ihre Produktionskapazitäten länderübergreifend auf ihre MOE-Tochtergesellschaften zu verlagern, um Skaleneffekte und Kosteneinsparungen besser nutzen zu können. Durch diese Neuorientierung konnten sich bestimmte Lebensmittelindustriezweige in einigen MOEL gegenüber anderen im Wettbewerb um die gemeinsamen Lebensmittelmärkte der EU behaupten. Zu den positiven Auswirkungen von ADI-Zuflüssen zählen eine rasche Steigerung der Produktivität sowie größere Mengen an Lebensmittelexporten. [source] Managing new-style currency crises: the swan diagram approach revisited,JOURNAL OF INTERNATIONAL DEVELOPMENT, Issue 5 2007Ramkishen S. Rajan Abstract The new-style currency crises that have afflicted a number of developing and emerging economies of late are characterised by sudden stops in capital inflows and adverse balance sheet effects. Given the potential high costs of these crises, there remains an ongoing debate on how they might best be managed when they do arise. This paper argues that the age-old Swan diagram, appropriately modified, is able to provide useful insights into how a country might manage a new-style crisis via a combination of adjustment (which involves expenditure switching and reducing polices) and financing. Copyright © 2006 John Wiley & Sons, Ltd. [source] Stimulants to capital inflows into emerging markets and the recent role of speculatorsJOURNAL OF INTERNATIONAL DEVELOPMENT, Issue 1 2001Dilip K. Das First page of article [source] Investigating the Balassa-Samuelson hypothesis in the transition: Do we understand what we see?THE ECONOMICS OF TRANSITION, Issue 2 2002A panel study This paper studies the Balassa-Samuelson (B-S) effect in the Czech Republic, Hungary, Poland, Slovakia and Slovenia. We use time series and panel cointegration techniques and show that the B-S effect works reasonably well in the transition economies under study during the period from 1991:Q1 to 2001:Q2. However, we find, that productivity growth does not fully translate into price increases because of the construction of the CPI indexes. We therefore argue that productivity growth will not hinder meeting the Maastricht criterion on inflation in the medium term. In addition, the observed appreciation of the CPI-deflated real exchange rate is found to be systematically higher compared with the real appreciation the B-S effect could justify, especially in the cases of the Czech Republic and Slovakia. This can be partly explained by the trend appreciation of the tradable price-based real exchange rate, increases in non-tradable prices due to price liberalization and demand-side pressures and the evolution of the nominal exchange rate determined by the nature of the exchange rate regime and the magnitude of capital inflows. JEL classification: E31, F31, O11, P17, [source] Do Capital Inflows Matter to Asset Prices?ASIAN ECONOMIC JOURNAL, Issue 3 2009The Case of Korea F32; F21; G12 In the present paper, we investigate whether capital flows induce domestic asset price hikes in the case of Korea. This issue is relevant for crisis-hit economies trying to prevent a boom,bust cycle as well as in the formulation of macroeconomic policy objectives in emerging market economies. Korea has recently experienced large capital inflows, in particular a surge in portfolio inflows. Furthermore, asset prices, including stock prices, land prices and nominal and real exchange rates, have also appreciated. The empirical results, obtained using a vector autoregression model, suggest that capital inflow shocks have caused stock prices but not land prices to increase. The effects on the nominal and real exchange rates have been limited, which relates to the accumulation of foreign exchange reserves. [source] Equity market and foreign capitalCANADIAN JOURNAL OF ECONOMICS, Issue 1 2009Yoko Furukawa Abstract I present a model that demonstrates that the market mechanism is not always effective in stabilizing an open equity market. Foreign capital inflows create multiple equilibria in the equity market, which may simultaneously trigger a currency crisis as well as an equity market crash even if the equity market is well developed. L'auteur présente un modèle qui montre que le mécanisme de marché n'est pas toujours efficace pour stabiliser un marché ouvert d'actions. Les influx de capitaux étrangers créent de multiples équilibres dans le marché des actions, qui peuvent simultanément engendrer une crise de la monnaie et un effondrement du marché des actions, même si le marché des actions est bien développé. [source] | ||||||||||