International Dollar Flows

Controlling International Capital Flows

The East Asian financial crisis in the late 1990s has challenged the widely-held belief that international financial markets should be deregulated. The common arguments both for and against free international capital flows are analysed and contrasted. Given the existence of various distortions and market failures in the global economy, there is a case for some degree of control. The extension a...

International Capital Flows

Essays on International Capital Flows

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Composition of International Capital Flows: A Survey

Composition of International Capital Flows: A Survey In this survey, we focus on key mechanisms through which liquidity and financial shocks affect major types of capital flows. We focus on a few models that examine the role of asymmetric information, liquidity preferences, limited enforcement, and incomplete markets on the composition of capital flows. We show that the information asymmetry be...

International Capital Flows and World Output Gains ∗

We develop a two-country overlapping-generations model with domestic financial frictions and show that cross-country differences in financial development explain three recent patterns of international capital flows. In our model, domestic financial frictions distort the interest rates and production efficiency in the less financially developed country. Capital flows not only lead to cross-count...