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Capital Flows to EU New Member States Does Sector Destination Matter?

The recent boom-bust episode in Emerging Europe was largely the product of surges and sudden stops in capital inflows. This paper empirically argues that the sectors into which capital flows determines their impact on GDP growth. Applying data from EU New Member States, it is found that capital flow...

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Bibliographic Details
Main Author: Mitra, Pritha
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2011
Series:IMF Working Papers
Subjects:
Credit
Wealth
Investments, Foreign
Finance
Monetary Economics
Saving
Monetary Policy, Central Banking, And The Supply Of Money And Credit: General
Long-term Capital Movements
Exports And Imports
International Economics
Capital Flows
Consumption; Economics
Capital Inflows
Consumption
Macroeconomics
Macroeconomics: Consumption
Capital Movements
Money And Monetary Policy
Foreign Direct Investment
International Investment
Slovak Republic
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:The recent boom-bust episode in Emerging Europe was largely the product of surges and sudden stops in capital inflows. This paper empirically argues that the sectors into which capital flows determines their impact on GDP growth. Applying data from EU New Member States, it is found that capital flows into real estate have a greater impact on swings in GDP than other sectors, irrespective of a country's exchange rate or fiscal policy. Consequently, as new waves of capital inflows spread to emerging markets, policies may usefully focus on supporting capital inflows towards economic sectors that minimize large swings in GDP.
Physical Description:27 pages
ISBN:9781455228034

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