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This paper creates an index of capital controls to analyze the determinants of capital flows to Brazil, accounting for the endogeneity of capital controls by considering a government that sets controls in response to capital flows. It finds that the government reacts strongly to capital flows by increasing controls on inflows during booms and relaxing them in moments of distress. The paper estimates a vector autoregression with capital flows, controls, and interest differentials. It shows that controls have been temporarily effective in altering levels and composition of capital flows but have had no sustained effects in the long run.

Exports and Imports --- Current Account Adjustment --- Short-term Capital Movements --- Open Economy Macroeconomics --- International Investment --- Long-term Capital Movements --- International economics --- Capital flows --- Capital controls --- Capital inflows --- Capital outflows --- Private capital flows --- Balance of payments --- Capital movements --- Brazil

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This paper reviews the causes, consequences, and policy responses to large capital flows in several emerging markets. It opens by studying recent patterns of capital flows, and then discusses the causes of capital flows. Emphasis is given to the reasons behind the capital inflow episode in the 1990s, the major reversals, and the volatility observed in these flows. The paper goes on to examine the consequences of capital inflows and the pros and cons of alternative policy responses. It concludes with policy lessons derived from country experiences.

Exports and Imports --- Foreign Exchange --- Current Account Adjustment --- Short-term Capital Movements --- Open Economy Macroeconomics --- International Investment --- Long-term Capital Movements --- International economics --- Currency --- Foreign exchange --- Capital inflows --- Capital flows --- Real exchange rates --- Capital controls --- Private capital flows --- Balance of payments --- Capital movements --- Chile

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This chapter discusses various aspects of financial crises and emerging market trade. The current global financial crisis and the sharp reduction in trade flows have raised questions about the extent to which access to capital affects the ability of companies to produce and sell exports and to buy imports. The results presented in this chapter imply that financial conditions play a significant, however, not dominant role in stimulating trade volumes among emerging market countries. Estimates presented in this paper suggest that the combination of zero net private capital flows to emerging markets and a domestic banking crisis could lower import volume growth by between 5 and 6 percent on impact, with a slightly lower effect on export volumes. It is also important to recognize that trade finance is not the only form of credit with implications for trade volumes. Conditions in credit markets more generally, including for working capital and long-term investment financing also have an impact on international trade, including through their impact on industrial production more generally. As such, it is probably sensible for policymakers to support credit flows in general rather than to focus specifically on increasing trade finance.

Banks and Banking --- Exports and Imports --- International Investment --- Long-term Capital Movements --- Trade: General --- Financial Crises --- Macroeconomic Aspects of International Trade and Finance: General --- International economics --- Economic & financial crises & disasters --- Private capital flows --- Banking crises --- Imports --- Exports --- Trade finance --- Balance of payments --- Financial crises --- International trade --- Capital movements --- International finance --- Argentina

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This paper evaluates the performance of Consensus Forecasts of GDP growth for industrialized and developing countries from 1989 to 1998. The questions addressed are (1) How do forecast errors differ across industrialized and developing countries? (2) How well do forecasters predict recessions? (3) Are forecasts efficient and unbiased? (4) How does private sector performance compare with that of international organizations? (5) Is forecaster discord a reliable predictor of forecast accuracy? Two key results emerge. First, the record of failure to predict recessions is virtually unblemished. Second, there is high degree of similarity between private forecasts and those of international organizations.

Exports and Imports --- Macroeconomics --- Taxation --- Macroeconomics: Production --- Aggregate Factor Income Distribution --- International Investment --- Long-term Capital Movements --- Taxation, Subsidies, and Revenue: General --- Forecasting and Simulation: Models and Applications --- Business Fluctuations --- Cycles --- International economics --- Public finance & taxation --- Economic Forecasting --- Economic growth --- Production growth --- Income inequality --- Private capital flows --- Tax incentives --- GDP forecasting --- Production --- National accounts --- Balance of payments --- Economic recession --- Economic theory --- Income distribution --- Capital movements --- National income --- Recessions --- United States

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Do highly indebted countries suffer from a debt overhang? Can debt relief foster their growth rates? To answer these important questions, this article looks at how the debt-growth relation varies with indebtedness levels, as well as with the quality of policies and institutions, in a panel of developing countries. The main findings are that, in countries with good policies and institutions, there is evidence of debt overhang when the net present value of debt rises above 20–25 percent of GDP; however, debt becomes irrelevant above 70–80 percent. In countries with bad policies and institutions, thresholds appear to be lower, but the evidence of debt overhang is weaker and we cannot rule out that debt is always irrelevant. Indeed, in such countries, as well as in countries with high indebtedness levels, investment does not depend on debt levels. The analysis suggests that not all countries are likely to profit from debt relief, and thus that a one-size-fits-all debt relief approach might not be the most appropriate one.

Banks and Banking --- Exports and Imports --- Macroeconomics --- Money and Monetary Policy --- Public Finance --- Debt --- Debt Management --- Sovereign Debt --- International Investment --- Long-term Capital Movements --- Macroeconomics: Consumption --- Saving --- Wealth --- International Lending and Debt Problems --- Fiscal Policy --- International economics --- Public finance & taxation --- Finance --- Banking --- Monetary economics --- Domestic debt --- Capital flows --- Consumption --- Debt burden --- Private capital flows --- Public debt --- Balance of payments --- National accounts --- External debt --- Debts, Public --- Capital movements --- Economics --- Debts, External --- Fiscal policy --- South Africa