Capital Inflows to Emerging Markets.

• Position: Feb 20-21, 1998

Participants in an NBER project on "Capital Inflows to Emerging Markets," organized by Sebastian Edwards of NBER and the University of California, Los Angeles, gathered in Cambridge on February 20 and 21 to hear the following reports:

Sebastian Edwards, "Capital Flows, Real Exchange Rates, and Capital Controls: Latin American Experiences"

Discussant: Jose de Gregorio, University of Chile

Paul R. Krugman, NBER and MIT, "Fire-Sale FDI"

Discussant: Aaron Tornell, NBER and Harvard University

Enrique Mendoza, Duke University, and Guillermo Calvo, University of Maryland, "Contagion, Globalization, and the Volatility of Capital Flows"

Discussant: Rudiger Dornbusch, NBER and MIT

Stijn Claessens, Daniel Oks, and Rossana Polastri, The World Bank, "Capital Flows to Central and Eastern Europe and the Former Soviet Union"

Discussant: Michael P. Dooley, NBER and University of California, Santa Cruz

Philippe Bachetta, Studienzentrum, Gerzensee, and Eric Van Wincoop, Federal Reserve Bank of New York, "Capital Flows to Emerging Markets: Liberalization, Overshooting, and Volatility"

Discussant: Carmen Reinhardt, University of Maryland

Geert Bekaert, NBER and Stanford University, and Campbell R. Harvey, NBER and Duke University, "Capital Flows and the Behavior of Emerging Market Equity Returns"

Discussant: James Conklin, Lehman Brothers

Holger C. Wolf, NBER and New York University, "Is There a Curse of Location? Spatial Determinants of Capital Flows to Emerging Markets"

Discussant: Miguel Savastano, International Monetary Fund

Barry Eichengreen, NBER and International Monetary Fund, and Ashoka Mody, University of Pennsylvania, "What Explains the Falling Spreads on Emerging-Market Debt: Fundamentals or Irrational Exuberance?"

Discussant: Sylvia Maxfield, Yale University

Takatoshi Ito, NBER and Hitotsubashi University, "Capital Flows in Asia"

Discussants: David Folkerts-Landau, International Monetary Fund, and Dani Rodrik, NBER and Harvard University

Edwards discusses Latin America's experience during the last 25 years regarding the effects of capital flows on real exchange rates and international competitiveness, and then focuses on the role of capital controls as a device for isolating emerging economies from the volatility of international capital markets. His empirical analysis of Chile's recent experiences with capital controls, and comparisons to Colombia's and Mexico's recent experiences, is particularly important because many analysts have praised the...