Capital Flow Measures : Structural or Cyclical Policy Tools?

Capital Flow Measures : Structural or Cyclical Policy Tools?

This paper analyzes the use of capital flow measures in emerging markets. Drawing on a specially compiled new database of capital flow measures, it establishes that policy makers in emerging market economies do not use capital flow measures as an a...

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Bibliographic Details
Main Authors: Gupta, Poonam, Masetti, Oliver
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2018
Subjects:
CAPITAL FLOWS
CAPITAL FLOW MEASURES
CAPITAL CONTROLS
MONETARY POLICY
EMERGING MARKET ECONOMIES
CYCLICAL POLICY
EXCHANGE RATES
BUSINESS CYCLES
CAPITAL ACCOUNT LIBERALZIATION
MACROPRUDENTIAL MEASURES
LIQUIDITY
CAPITAL SHOCKS
FOREIGN DIRECT INVESTMENT
Online Access:http://documents.worldbank.org/curated/en/790071524749421627/Capital-flow-measures-structural-or-cyclical-policy-tools
http://hdl.handle.net/10986/29755
id okr-10986-29755
recordtype oai_dc
spelling okr-10986-297552021-06-08T14:42:46Z Capital Flow Measures : Structural or Cyclical Policy Tools? Gupta, Poonam Masetti, Oliver CAPITAL FLOWS CAPITAL FLOW MEASURES CAPITAL CONTROLS MONETARY POLICY EMERGING MARKET ECONOMIES CYCLICAL POLICY EXCHANGE RATES BUSINESS CYCLES CAPITAL ACCOUNT LIBERALZIATION MACROPRUDENTIAL MEASURES LIQUIDITY CAPITAL SHOCKS FOREIGN DIRECT INVESTMENT This paper analyzes the use of capital flow measures in emerging markets. Drawing on a specially compiled new database of capital flow measures, it establishes that policy makers in emerging market economies do not use capital flow measures as an active tool at business cycle frequency. While there is a general trend toward the liberalization of capital accounts, the use of capital flow measures as a countercyclical policy tool is rather sporadic. Instead, countries show a distinct preference for using monetary policy, exchange rate adjustments, macro prudential measures, and adjustments in external reserves to modulate the impacts of domestic business cycles, international liquidity cycles, and shocks to capital flows. Regulation of different kinds of capital flows -- resident and nonresident flows; inflows and outflows; and foreign direct investment, portfolio, and banking sector flows -- is changed infrequently and is acyclical to domestic business and external liquidity cycles. 2018-04-30T15:48:19Z 2018-04-30T15:48:19Z 2018-04 Working Paper http://documents.worldbank.org/curated/en/790071524749421627/Capital-flow-measures-structural-or-cyclical-policy-tools http://hdl.handle.net/10986/29755 English Policy Research Working Paper;No. 8418 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic CAPITAL FLOWS
CAPITAL FLOW MEASURES
CAPITAL CONTROLS
MONETARY POLICY
EMERGING MARKET ECONOMIES
CYCLICAL POLICY
EXCHANGE RATES
BUSINESS CYCLES
CAPITAL ACCOUNT LIBERALZIATION
MACROPRUDENTIAL MEASURES
LIQUIDITY
CAPITAL SHOCKS
FOREIGN DIRECT INVESTMENT
spellingShingle CAPITAL FLOWS
CAPITAL FLOW MEASURES
CAPITAL CONTROLS
MONETARY POLICY
EMERGING MARKET ECONOMIES
CYCLICAL POLICY
EXCHANGE RATES
BUSINESS CYCLES
CAPITAL ACCOUNT LIBERALZIATION
MACROPRUDENTIAL MEASURES
LIQUIDITY
CAPITAL SHOCKS
FOREIGN DIRECT INVESTMENT
Gupta, Poonam
Masetti, Oliver
Capital Flow Measures : Structural or Cyclical Policy Tools?
relation Policy Research Working Paper;No. 8418
description This paper analyzes the use of capital flow measures in emerging markets. Drawing on a specially compiled new database of capital flow measures, it establishes that policy makers in emerging market economies do not use capital flow measures as an active tool at business cycle frequency. While there is a general trend toward the liberalization of capital accounts, the use of capital flow measures as a countercyclical policy tool is rather sporadic. Instead, countries show a distinct preference for using monetary policy, exchange rate adjustments, macro prudential measures, and adjustments in external reserves to modulate the impacts of domestic business cycles, international liquidity cycles, and shocks to capital flows. Regulation of different kinds of capital flows -- resident and nonresident flows; inflows and outflows; and foreign direct investment, portfolio, and banking sector flows -- is changed infrequently and is acyclical to domestic business and external liquidity cycles.
format Working Paper
author Gupta, Poonam
Masetti, Oliver
author_facet Gupta, Poonam
Masetti, Oliver
author_sort Gupta, Poonam
title Capital Flow Measures : Structural or Cyclical Policy Tools?
title_short Capital Flow Measures : Structural or Cyclical Policy Tools?
title_full Capital Flow Measures : Structural or Cyclical Policy Tools?
title_fullStr Capital Flow Measures : Structural or Cyclical Policy Tools?
title_full_unstemmed Capital Flow Measures : Structural or Cyclical Policy Tools?
title_sort capital flow measures : structural or cyclical policy tools?
publisher World Bank, Washington, DC
publishDate 2018
url http://documents.worldbank.org/curated/en/790071524749421627/Capital-flow-measures-structural-or-cyclical-policy-tools
http://hdl.handle.net/10986/29755
_version_ 1764470175963283456

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