Are Capital Inflows Expansionary or Contractionary? Theory, Policy Implications, and Some Evidence »
Series: IMF Working Papers
Author(s): Olivier Blanchard , Jonathan Ostry , Atish Ghosh , and Marcos Chamon
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 23 October 2015
Keywords: capital inflows, bonds, bond, return, domestic bonds, All Countries, apital inflows,
The workhorse open-economy macro model suggests that capital inflows are contractionary because they appreciate the currency and reduce net exports. Emerging market policy makers however believe that inflows lead t...