L´Hotellerie-Fallois, Pilar Moreno, Pablo Balteanu, Irina Beirne, John Brüggemann, Axel Bussière, Matthieu Estrada, Ángel Frost, Jon Herzberg, Valerie Metzemakers, Paul Reinhardt, Dennis Broos, Menno Ghalanos, Michalis Kennedy, Bernard Landbeck, Alexander Lerner, Christina Menezes, Paula Schiavone, Alessandro Tilley, Thomas
The last decade has been characterised by the pronounced volatility of capital flows. While cross-border capital flows can have many benefits for both advanced and emerging market economies, they may also carry risks, which require appropriate policy responses. Disentangling the push from the pull factors driving capital flows is key to designing appropriate policies to deal with them. Strong institutions, sound fundamentals and a large domestic investor base tend to shield economies from adverse global conditions and attract less volatile types of capital. However, when the policy space for using traditional macroeconomic policies is limited, countries may also turn to macroprudential and capital flow management policies in a pragmatic manner. The IMF can play an important role in helping countries to deal with capital flows, through its surveillance and lending policy and through international cooperation.
capital flow management capital flows IMF international cooperation