Global Capital Flows

Global Capital Flows examines the rapid growth and dramatic changes in capital flows globally and to emerging markets. It draws on much unpublished data. From an examination of the theoretical literature on financial volatility, systemic risk and financial crises, the book outlines and analyses clear benefits and potential costs of large and volatile capital flows to developing and transition economies: the costs include risk of damaging currency crisis as occurred in Mexico and the East Asian economies. The book analyses policy options on how best recipient countries’ governments can deal with large capital flow surges, to maximise positive effects and avoid problematic ones. It also makes innovative proposals on how best regulators in source countries can improve information and regulation to make currency crises less likely. The book starts with an important foreword by Nobel Prize winner James Tobin.