Managing Capital Flows and
Exchange Rates. Perspective from the Pacific Basin
The essays in this volume
examine the theoretical and policy issues associated with international capital flows and
exchange rates for emerging markets in the Pacific Basin region. Emerging market countries
in both Asia and Latin America offer a wide variety of examples for the comparative study
of the implications of international capital flow surges and appropriate policy responses.
The essays address four broad issues. First, they investigate the determinants of
international capital flows, particularly the relative role of domestic and external
factors in driving capital flows. Second, they inquire how predictable and contagious
capital flow reversals and exchange rate crises are. Third, they explore what the domestic
economic effects of capital inflows on emerging economies have been, and finally seek to
suggest what are the appropriate responses by policymakers to capital inflow surges.
Contributors: Reuven Glick,
Henning Bohn, Linda L. Tesar, Linda S. Goldberg, Michael Klein, Pierre-Richard Agénor,
Alexander Hoffmaister, Theo S. Eicher, Stephen J. Turnovsky, Richard A. Meese, Andrew K.
Rose, Peter Garber, Subir Lall, Jeffrey A. Frankel, Sergio L. Schmukler, Holger Wolf,
Helmut Reisen, Ronald I. McKinnon, Huw Pill, Steven Kamin, Paul Wood, Kenneth Kletzer,
Mark Spiegel, Carmen M. Reinhart, R. Todd Smith, Kevin Cowan, Jose De Gregorio.
Contents
1. Managing capital flows and
exchange rates: overview Reuven Glick
Part I. Determinants of
Capital Flows and Exchange Rates
2. US portfolio investment in
Asian capital markets Henning Bohn and Linda L. Tesar
3. FDI, trade, and real
exchange rate linkages in developing countries Linda S. Goldberg and Michael Klein
4. Capital inflows and the
real exchange rate: analytical framework and econometric evidence Pierre-Richard
Agénor and Alexander Hoffmaister
5. Risk and financial
development: a comparative case study of Mexico and Indonesia Theo S. Eicher and
Stephen J. Turnovsky
Part II. Exchange Rate Crisis
and Contagion
6. Exchange rate instability:
determinants and predictability Richard A. Meese and Andrew K. Rose
7. Derivative products in
exchange rate crisis Peter Garber and Subir Lall
8. Crisis, contagion, and
country funds: effects on East Asia and Latin America Jeffrey A. Frankel and Sergio L.
Schmukler
9. Co-movements among
emerging equity markets Holger Wolf
Part III. Effects of Capital
Inflows
10. Net capital inflows: how
much to accept, how much to resist? Helmut Reisen
11. The overborrowing
syndrome: are East Asian economies different? Ronald I. McKinnon and Huw Pill
12. Capital inflows,
financial intermediation, and aggregate demand: empirical evidence from Mexico and other
Pacific Basin countries Steven Kamin and Paul Wood
Part IV. Policy Responses to
Capital Inflows
13. Speculative capital
inflows and exchange rates targeting in the Pacific Basin: theory and evidence Kenneth
Kletzer and Mark Spiegel
14. Too much of a good thing:
the macroeconomic effects of taxing capital inflows Carmen M. Reinhart and R. Todd
Smith
15. Exchange rate policies
and capital account management: Chile in the 1990s Kevin Cowen and Jose De Gregorio.
515 pages