Contributions

  • Drazen, Allan. - Contributor
  • National Bureau of Economic Research. - Contributor

Publication

1996 - National Bureau of Economic Research, Cambridge, MA, Massachusetts

Language

English

Word Count

7,750 words, Guess

Page Count

31 pages

Identifiers

Description

"We present a model where policies of free capital mobility can signal governments' future policies, but the informativeness of the signal depends on the path of world interest rates. Capital flows to "emerging markets" reflect investors' perception of these markets' political risk. With low world interest rates, emerging markets experience a capital inflow and engage in a widespread policy of free capital mobility, whereas others impose controls to trap capital onshore, thus signaling future policies affecting capital mobility. These predictions are consistent with the recent experience of capital flows and policies affecting capital mobility in developing countries"--Federal Reserve Bank of New York web site.

Subjects

Series Statement

  • NBER working paper series -- working paper 5727
  • Working paper series (National Bureau of Economic Research) -- working paper no. 5727.

Links

Other Editions

  • When liberal policies reflect external shocks, what do we learn?National Bureau of Economic Research1996-01-01

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