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Capital Flows, Exchange Rate Flexibility, and the Real Exchange Rate, Jean-Louis Combes, Patrick Plane, Tidiane Kinda

Label
Capital Flows, Exchange Rate Flexibility, and the Real Exchange Rate, Jean-Louis Combes, Patrick Plane, Tidiane Kinda
Language
eng
Abstract
This paper analyzes the impact of capital inflows and exchange rate flexibility on the real exchange rate in developing countries based on panel cointegration techniques. The results show that public and private flows are associated with a real exchange rate appreciation. Among private flows, portfolio investment has the highest appreciation effect-almost seven times that of foreign direct investment or bank loans-and private transfers have the lowest effect. Using a de facto measure of exchange rate flexibility, we find that a more flexible exchange rate helps to dampen appreciation of the real exchange rate stemming from capital inflows
Bibliography note
Includes bibliographical references
resource.governmentPublication
international or intergovernmental publication
Literary Form
non fiction
Main title
Capital Flows, Exchange Rate Flexibility, and the Real Exchange Rate
Nature of contents
dictionaries
Responsibility statement
Jean-Louis Combes, Patrick Plane, Tidiane Kinda
Series statement
IMF Working Papers
Table Of Contents
Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Composition of Capital Inflows, Exchange Rate Regime, and The Real Exchange Rate; A. Composition of Capital Inflows and the Real Exchange Rate; B. Exchange Rate Regime and the Real Exchange Rate; III. External Financing in Developing Countries; 1. External Financing in Developing Countries; 2. The Real Exchange Rate and Capital Inflows; IV. Econometric Model; 3. Index of Exchange Rate Flexibility; V. Econometric Results; A. Composition of Capital Inflows and the Real Exchange Rate1. Composition of Capital Inflows and the Real Exchange RateB. Exchange Rate Regime and the Real Exchange Rate; 2. Capital Inflows, Exchange Rate Flexibility, and the REER; VI. Conclusion; Appendix; A.1. List, Definitions, and Sources of Variables; A.2. Summary Statistics; A.1. External Financing in Emerging Market Economies; A.3. Unit Root Tests; A.4. Composition of Capital Inflows and the Real Exchange Rate (LICs); A.5. Robustness Check: Exchange Rate Flexibility and the Real Exchange Rate; A.6. Exchange Rate Flexibility Index; References; Footnotes
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