When it rains, it pours
Subtitle: procyclical capital flows and macroeconomic policies
By: Graciela L. Kaminsky, Carmen M. Reinhart, Carlos A. Vegh.
Contributors: Reinhart, Carmen M.; Végh Gramont, Carlos A., 1958-; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10780; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10780.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Capital movements.; Fiscal policy.; Monetary policy.
Description: "Based on a sample of 104 countries, we document four key stylized facts regarding the interaction between capital flows, fiscal policy, and monetary policy.  First, net capital inflows are procyclical (i.e., external borrowing increases in good times and falls in bad times) in most OECD and developing countries.  Second, fiscal policy is procyclical (i.e., government spending increases in good times and falls in bad times) for the majority of developing countries.  Third, for emerging markets, monetary policy appears to be procyclical (i.e., policy rates are lowered in good times and raised in bad times).  Fourth, in developing countries - and particularly for emerging markets - periods of capital inflows are associated with expansionary macroeconomic policies and periods of capital outflows with contractionary macroeconomic policies.  In such countries, therefore, when it rains, it does indeed pour"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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Mode of access: World Wide Web.