Capital Flows and Real Exchange Rates in Emerging Asian Countries

Jongwanich, Juthathip

doi:10.2139/ssrn.1677765

Cited by 23 publications

(27 citation statements)

References 6 publications

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“…31 Under partial dollarization, individuals use US dollars or other hard currency to make transactions (payment dollarization) and protect their purchasing power of financial assets (financial dollarization). 32 In these economies, typically the bulk of large-scale transactions, both tradable and non-tradable, 28 See, for example, Bakardzhieva et al (2010), Lartey (2011), Combes et al (2012 and Jongwanich and Kohpaiboon (2013). 29 See, for example, Dell'Ariccia et al (2008) and Kose et al (2006).…”

Section: Myth 13: Large Foreign Capital Inflows Can Cause a Dutch Dismentioning

confidence: 99%

Demystifying Dutch Disease

Kojo

2015

J. Intl Econ. Comm. Policy.

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This paper examines the theory of Dutch disease and its implications for practical policy questions. Dutch disease is a term that is well-known to economists and development practitioners. But it is also a concept that is often conflated with "resource curse" and misinterpreted as a "disease" that necessarily causes adverse impacts on the economy. The paper points out that many of the seemingly well-established arguments in this field are not necessarily grounded in theory or empirical evidence. Great care is needed in diagnosing Dutch disease and formulating policy prescriptions based on the theoretical framework, given the restrictive assumptions that may not be fully applicable and the limited relevance to today's inextricably intertwined trade flows.

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Section: Myth 13: Large Foreign Capital Inflows Can Cause a Dutch Dismentioning

confidence: 99%

Demystifying Dutch Disease

Kojo

2015

J. Intl Econ. Comm. Policy.

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“…9 Likewise, Jongwanich (2010) estimates a dynamic panel model to understand the nexus between capital flows and real exchange rates for the period 2000-2009, which roughly corresponds to our sample. He shows that both portfolio and FDI inflows lead to a significant real appreciation.…”

Section: The Identifying Restrictionsmentioning

confidence: 99%

Capital inflows and asset prices: Evidence from emerging Asia

Tillmann

2013

Journal of Banking & Finance

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The withdrawal of foreign capital from emerging countries at the height of the recent financial crisis and its quick return sparked a debate about the impact of capital flow surges on asset markets. This paper addresses the response of property prices to an inflow of foreign capital. For that purpose we estimate a panel VAR on a set of Asian emerging market economies, for which the waves of inflows were particularly pronounced, and identify capital inflow shocks based on sign restrictions. Our results suggest that capital inflow shocks have a significant effect on the appreciation of house prices and equity prices. Capital inflow shocks account for -roughly -twice the portion of overall house price changes they explain in OECD countries. We also address cross-country differences in the house price responses to shocks, which are most likely due to differences in the monetary policy response to capital inflows.

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“…They conclude that capital inflow periods are associated with an acceleration of GDP growth and a real appreciation. 8 Likewise, Jongwanich (2010) estimates a dynamic panel model to understand the nexus between capital flows and real exchange rates for the period 2000-2009, which roughly corresponds to our sample. He shows that both portfolio and FDI inflows lead to a significant real appreciation.…”

Section: The Identifying Restrictionsmentioning

confidence: 99%

Capital Inflows and Asset Prices: Evidence from Emerging Asia

Tillmann

2012

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: The withdrawal of foreign capital from emerging countries at the height of the recent financial crisis and its quick return sparked a debate about the impact of capital flow surges on asset markets. This paper addresses the response of property prices to an inflow of foreign capital. For that purpose we estimate a panel VAR on a set of Asian emerging market economies, for which the waves of inflows were particularly pronounced, and identify capital inflow shocks based on sign restrictions. Our results suggest that capital inflow shocks have a significant effect on the appreciation of house prices and equity prices. Capital inflow shocks account for -roughly -twice the portion of overall house price changes they explain in OECD countries. We also address crosscountry differences in the house price responses to shocks, which are most likely due to differences in the monetary policy response to capital inflows. Terms of use: Documents in

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Capital Flows and Real Exchange Rates in Emerging Asian Countries

Cited by 23 publications

References 6 publications

Demystifying Dutch Disease

Demystifying Dutch Disease

Capital inflows and asset prices: Evidence from emerging Asia

Capital Inflows and Asset Prices: Evidence from Emerging Asia

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