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Managing Economic Stability under Volatile Capital Flows: East Asia Perspectives

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  • Chalongphob Sussangkarn

    (Thailand Development Research Institute)

Abstract

The extent of financial globalization and volatilities of short-term capital flows create many challenges for policies of individual economies as well as challenges to global and regional mechanisms that should provide effective safety nets for countries to maintain financial stability. To maintain economic stability, countries—particularly emerging market economies—need to make use of appropriate policy tools, including monetary and exchange rate policy, reserves accumulation, and, when needed, capital control and macro-prudential measures. In addition, liquidity support mechanisms, whether bilateral, global, or regional can make a crucial difference in times of stress. Bilateral arrangements are by nature political so may not be reliable for many countries. Global (IMF) and East Asian regional arrangements (Chiang Mai Initiative Multilateralization) still do not have effective designs that will make them attractive to countries in the region. Recommendations are put forward on how these facilities can be modified to make them more attractive and effective.

Suggested Citation

  • Chalongphob Sussangkarn, 2017. "Managing Economic Stability under Volatile Capital Flows: East Asia Perspectives," Asian Economic Papers, MIT Press, vol. 16(1), pages 174-192, Winter/Sp.
    • Handle: RePEc:tpr:asiaec:v:16:y:2017:i:1:p:174-192
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    References listed on IDEAS

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    1. Maria Socorro Gochoco-Bautista & Juthathip Jongwanich & Jong-Wha Lee, 2012. "How Effective Are Capital Controls in Asia?," Asian Economic Papers, MIT Press, vol. 11(2), pages 122-143, Summer.
    2. Bokyeong Park & Jiyoun An, 2012. "Thailand: Can Capital Account Liberalization Lessen Capital Volatility in a Country with “Original Sin”?," Asian Economic Papers, MIT Press, vol. 11(2), pages 1-22, Summer.
    3. Chalongphob SUSSANGKARN, 2011. "Chiang Mai Initiative Multilateralization: Origin, Development, and Outlook," Asian Economic Policy Review, Japan Center for Economic Research, vol. 6(2), pages 203-220, December.
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    Cited by:

    1. Barry Eichengreen & Poonam Gupta & Oliver Masetti, 2018. "Are Capital Flows Fickle? Increasingly? And Does the Answer Still Depend on Type?," Asian Economic Papers, MIT Press, vol. 17(1), pages 22-41, Winter/Sp.
    2. Chalongphob Sussangkarn, 2020. "Promoting Local Currency Usage in the Region," Asian Economic Papers, MIT Press, vol. 19(2), pages 1-16, Summer.
    3. Mohamed Ariff & Alireza Zarei, 2018. "Sustainable Development and Currency Exchange Rate Behavior," Asian Economic Papers, MIT Press, vol. 17(3), pages 148-173, Fall.
    4. Peter J. Morgan, 2020. "A Framework for Regional Banking Regulation in ASEAN," Asian Economic Papers, MIT Press, vol. 19(3), pages 111-125, Fall.

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    More about this item

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G00 - Financial Economics - - General - - - General

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