The long-run effects of portfolio capital inflow booms in developing countries: permanent structural hangovers after short-term financial euphoria

Most of the literature about the effects of portfolio capital inflows to developing countries focuses on how macroeconomic stability is affected. Very little has been said on the long-run consequences that temporary booms in portfolio capital flows may bear by affecting the productive structure, par...

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Autor principal:	Botta, Alberto
Formato:	Texto
Lenguaje:	English
Publicado:	ECLAC 2018
Materias:	CAPITAL MOVIMIENTOS DE CAPITAL CORRIENTES FINANCIERAS ESPECULACION CICLOS ECONOMICOS CAPITAL MOVEMENTS FINANCIAL FLOWS SPECULATION BUSINESS CYCLES
Acceso en línea:	http://hdl.handle.net/11362/44282
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spelling	oai-11362-442822019-04-16T14:24:39Z The long-run effects of portfolio capital inflow booms in developing countries: permanent structural hangovers after short-term financial euphoria Botta, Alberto CAPITAL MOVIMIENTOS DE CAPITAL CORRIENTES FINANCIERAS ESPECULACION CICLOS ECONOMICOS CAPITAL CAPITAL MOVEMENTS FINANCIAL FLOWS SPECULATION BUSINESS CYCLES Most of the literature about the effects of portfolio capital inflows to developing countries focuses on how macroeconomic stability is affected. Very little has been said on the long-run consequences that temporary booms in portfolio capital flows may bear by affecting the productive structure, particularly manufacturing development, of developing countries. The present paper tries to partially fill this gap. We first build a simple theoretical model to show how booming portfolio inflows may interact with domestic speculation at home, giving rise to a climate of financial euphoria featuring an appreciating exchange rate and rising prices of domestic speculative assets. We also discuss that such euphoria hardly lasts forever, but rather ends up in a phase of heightened financial turmoil and volatility. As for the long run, we maintain the Kaldorian perspective according to which manufacturing plays a crucial role for the development process of backward economies. Abstract .-- Introduction .-- I. Portfolio inflows in a two-sector economy with a “speculative” sector .-- II. Portfolio booms, exchange rate appreciation and medium-term financial cycles in developing countries .-- III. Possible long-run damages of volatile portfolio booms and unstable financial euphoria .-- IV. Some concluding policy implications. 2018-12-06T15:33:53Z 2018-12-06T15:33:53Z 2018-12-06 Texto Documento Completo http://hdl.handle.net/11362/44282 LC/TS.2018/96 en Serie Desarrollo Productivo 221 .pdf application/pdf AMERICA LATINA Y EL CARIBE LATIN AMERICA AND THE CARIBBEAN ECLAC
institution	Cepal
collection	Cepal
language	English
topic	CAPITAL MOVIMIENTOS DE CAPITAL CORRIENTES FINANCIERAS ESPECULACION CICLOS ECONOMICOS CAPITAL CAPITAL MOVEMENTS FINANCIAL FLOWS SPECULATION BUSINESS CYCLES
spellingShingle	CAPITAL MOVIMIENTOS DE CAPITAL CORRIENTES FINANCIERAS ESPECULACION CICLOS ECONOMICOS CAPITAL CAPITAL MOVEMENTS FINANCIAL FLOWS SPECULATION BUSINESS CYCLES Botta, Alberto The long-run effects of portfolio capital inflow booms in developing countries: permanent structural hangovers after short-term financial euphoria
description	Most of the literature about the effects of portfolio capital inflows to developing countries focuses on how macroeconomic stability is affected. Very little has been said on the long-run consequences that temporary booms in portfolio capital flows may bear by affecting the productive structure, particularly manufacturing development, of developing countries. The present paper tries to partially fill this gap. We first build a simple theoretical model to show how booming portfolio inflows may interact with domestic speculation at home, giving rise to a climate of financial euphoria featuring an appreciating exchange rate and rising prices of domestic speculative assets. We also discuss that such euphoria hardly lasts forever, but rather ends up in a phase of heightened financial turmoil and volatility. As for the long run, we maintain the Kaldorian perspective according to which manufacturing plays a crucial role for the development process of backward economies.
format	Texto
author	Botta, Alberto
author_facet	Botta, Alberto
author_sort	Botta, Alberto
title	The long-run effects of portfolio capital inflow booms in developing countries: permanent structural hangovers after short-term financial euphoria
title_short	The long-run effects of portfolio capital inflow booms in developing countries: permanent structural hangovers after short-term financial euphoria
title_full	The long-run effects of portfolio capital inflow booms in developing countries: permanent structural hangovers after short-term financial euphoria
title_fullStr	The long-run effects of portfolio capital inflow booms in developing countries: permanent structural hangovers after short-term financial euphoria
title_full_unstemmed	The long-run effects of portfolio capital inflow booms in developing countries: permanent structural hangovers after short-term financial euphoria
title_sort	long-run effects of portfolio capital inflow booms in developing countries: permanent structural hangovers after short-term financial euphoria
publisher	ECLAC
publishDate	2018
url	http://hdl.handle.net/11362/44282
work_keys_str_mv	AT bottaalberto thelongruneffectsofportfoliocapitalinflowboomsindevelopingcountriespermanentstructuralhangoversaftershorttermfinancialeuphoria AT bottaalberto longruneffectsofportfoliocapitalinflowboomsindevelopingcountriespermanentstructuralhangoversaftershorttermfinancialeuphoria
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The long-run effects of portfolio capital inflow booms in developing countries: permanent structural hangovers after short-term financial euphoria

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