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Capital Inflows, Sterilization, and Commercial Bank Speculation :, The Case of the Czech Republic in the Mid-1990's, Jakob Christensen

Abstract
The paper analyzes the relationship between large-scale capital inflows and sterilization efforts in the Czech Republic during 1993–96 using a vector autoregression (VAR) model, which consists of domestic credit, foreign reserves, and domestic and foreign interest rates. The analysis finds that despite initial success in sterilizing capital inflows, this strategy proved increasingly costly and ultimately unsustainable as domestic interest rates attracted more capital inflows. The commercial banks exploited a profitable sterilization game, whereby they borrowed cheaply abroad and invested the funds domestically in high-yielding sterilization bonds
Table Of Contents
""Contents""; ""I. INTRODUCTION""; ""II. CAPITAL INFLOWS, POLICY RESPONSES, AND THE CURRENCY CRISIS, 1993�97""; ""III. CAPITAL INFLOWS, STERILIZATION, AND THE MONETARY APPROACH TO THE BALANCE OF PAYMENTS""; ""IV. EMPIRICAL QUESTIONS, ECONOMETRIC METHODOLOGY, AND DATA ISSUES""; ""V. EMPIRICAL EVIDENCE""; ""VI. CONCLUSIONS AND SOME POLICY IMPLICATIONS""; ""References""
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (29 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9780145270964

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