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Capital Inflow into Developing Economies: A Macroeconomic Study

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  • Soumyen Sikdar

Abstract

External capital inflow on a massive scale into the emerging market economies is a very significant phenomenon of recent years. Making distinctions between direct investment, real and financial, and portfolio investment and incorporating crowding in or crowding out effects we derive some results about the impact of higher inflow on output, investment and the exchange rare. A formula is suggested for estimating the cost of central bank intervention.

Suggested Citation

  • Soumyen Sikdar, 2008. "Capital Inflow into Developing Economies: A Macroeconomic Study," ISER Discussion Paper 0725, Institute of Social and Economic Research, Osaka University.
    • Handle: RePEc:dpr:wpaper:0725
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    File URL: https://www.iser.osaka-u.ac.jp/library/dp/2008/DP0725.pdf
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    References listed on IDEAS

    as
    1. Blanchard, Olivier J, 1981. "Output, the Stock Market, and Interest Rates," American Economic Review, American Economic Association, vol. 71(1), pages 132-143, March.
    2. Krugman, Paul, 2000. "How Complicated Does the Model Have to Be?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 16(4), pages 33-42, Winter.
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