Surging Capital Flows to Emerging Asia: Facts, Impacts, and Responses

By Sylwia Nowak, Sanjaya P Panth, Ravi Balakrishnan, Yiqun Wu

May 1, 2012

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Format: Chicago

Sylwia Nowak, Sanjaya P Panth, Ravi Balakrishnan, and Yiqun Wu. Surging Capital Flows to Emerging Asia: Facts, Impacts, and Responses, (USA: International Monetary Fund, 2012) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Net capital flows to emerging Asia rebounded at a record pace following the global financial crisis, raising concerns about overheating and financial stability. This paper documents the size and composition of the most recent surge to Asian emerging markets from a historical perspective and compares developments in the broader economy, asset prices, and corporate variables across the different episodes of strong inflows. We find little evidence of a significant build-up of imbalances and resource misallocation during the most recent surge. We also review country experiences in managing the risks associated with inflows and argue that Asian countries have used regulatory measures during past surges, although there is not strong evidence of their efficacy without supporting monetary and fiscal policies.

Subject: Balance of payments, Balance of payments statistics, Capital flows, Capital inflows, Economic and financial statistics, Financial crises, Global financial crisis of 2008-2009, Private capital flows

Keywords: Asia, Asia and Pacific, Balance of payments statistics, Capital flows, Capital inflows, Central bank, ED142, Equity ratio, Financial crisis, Global, Global financial crisis of 2008-2009, IMF staff calculation, Indonesia, Interest rate, Macroprudential policy, Net capital, Net capital flow, Portfolio debt, Portfolio equity, Portfolio flow, Private capital flows, Thailand, WP

Publication Details

Pages:

28
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2012/130
Stock No:

WPIEA2012130
ISBN:

9781475503821
ISSN:

1018-5941

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