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Growth and Capital Flows with Risky Entrepreneurship

Author : Mr.Damiano Sandri

Publisher : International Monetary Fund

Page : 28 pages

File Size : 22,8 MB

Release : 2010-02-01

Category : Business & Economics

ISBN : 1451962800

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Book Description

This paper shows that the behavior of entrepreneurs facing incomplete financial markets and risky investment can explain why growth accelerations in developing countries tend to be associated with current account improvements. The uninsurable risk of losing invested capital forces entrepreneurs to rely on self-financing, so that when business opportunities open up entrepreneurs increase saving to finance the investment that produces growth. The key insight is that saving has to rise more than investment to allow also for the accumulation of precautionary assets. Plausibly calibrated simulations show that this net saving increase can sustain large and persistent net capital outflows.



Capital Flows at Risk: Taming the Ebbs and Flows

Author : Mr.R. G Gelos

Publisher : International Monetary Fund

Page : 44 pages

File Size : 18,5 MB

Release : 2019-12-20

Category : Business & Economics

ISBN : 1513522906

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Book Description

The volatility of capital flows to emerging markets continues to pose challenges to policymakers. In this paper, we propose a new framework to answer critical policy questions: What policies and policy frameworks are most effective in dampening sharp capital flow movements in response to global shocks? What are the near- versus medium-term trade-offs of different policies? We tackle these questions using a quantile regression framework to predict the entire future probability distribution of capital flows to emerging markets, based on current domestic structural characteristics, policies, and global financial conditions. This new approach allows policymakers to quantify capital flows risks and evaluate policy tools to mitigate them, thus building the foundation of a risk management framework for capital flows.



Bank Leverage and Monetary Policy's Risk-Taking Channel

Author : Mr.Giovanni Dell'Ariccia

Publisher : International Monetary Fund

Page : 41 pages

File Size : 41,44 MB

Release : 2013-06-06

Category : Business & Economics

ISBN : 1484381130

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Book Description

We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s loan portfolio) is negatively associated with increases in short-term policy interest rates. This relationship is less pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and economic distress. These results contribute to the ongoing debate on the role of monetary policy in financial stability and suggest that monetary policy has a bearing on the riskiness of banks and financial stability more generally.



Raising Entrepreneurial Capital

Author : John B. Vinturella

Publisher : Elsevier

Page : 423 pages

File Size : 30,53 MB

Release : 2003-12-02

Category : Business & Economics

ISBN : 008046999X

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Book Description

Approx.393 pagesApprox.393 pages



International Capital Flow Pressures

Author : Ms.Linda S. Goldberg

Publisher : International Monetary Fund

Page : 58 pages

File Size : 41,98 MB

Release : 2018-02-16

Category : Business & Economics

ISBN : 1484341805

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Book Description

This paper presents a new measure of capital flow pressures in the form of a recast Exchange Market Pressure index. The measure captures pressures that materialize in actual international capital flows as well as pressures that result in exchange rate adjustments. The formulation is theory-based, relying on balance of payments equilibrium conditions and international asset portfolio considerations. Based on the modified exchange market pressure index, the paper also proposes the Global Risk Response Index, which reflects the country-specific sensitivity of capital flow pressures to measures of global risk aversion. For a large sample of countries over time, we demonstrate time variation in the effects of global risk on exchange market pressures, the evolving importance of the global factor across types of countries, and the changing risk-on or risk-off status of currencies.



How Venture Capital Works

Author : Phillip Ryan

Publisher : The Rosen Publishing Group, Inc

Page : 82 pages

File Size : 13,25 MB

Release : 2012-07-01

Category : Juvenile Nonfiction

ISBN : 1448867959

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Book Description

Explanations to the inner workings of one of the least understood, but arguably most important, areas of business finance is offered to readers in this engaging volume: venture capital. Venture capitalists provide necessary investment to seed (or startup) companies, but the startup is only the beginning, there is much more to be explored. These savvy investors help guide young entrepreneurs, who likely have little experience, to turn their businesses into the Googles, Facebooks, and Groupons of the world. This book explains the often-complex methods venture capitalists use to value companies and to get the most return on their investments, or ROI. This book is a must-have for any reader interested in the business world.



Exchange Rate Flexibility and Credit during Capital Inflow Reversals

Author : Mr.Nicolas E. Magud

Publisher : International Monetary Fund

Page : 30 pages

File Size : 28,59 MB

Release : 2014-04-16

Category : Business & Economics

ISBN : 1484353463

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Book Description

We document the behavior of macro and credit variables during episodes of capital inflows reversals in economies with different degrees of exchange rate flexibility. We find that exchange rate flexibility is associated with milder credit growth during the boom but, even though smaller than in more rigid regimes, it cannot shield the economy from a credit reversal. Furthermore, we observe what we dub as a recovery puzzle: credit growth in economies with more flexible exchange rate regimes remains tepid well after the capital flow reversal takes place. This results stress the complementarity of macro-prudential policies with the exchange rate regime. More flexible regimes could help smoothing the credit cycle through capital surchages and dynamic provisioning that build buffers to counteract the credit recovery puzzle. In contrast, more rigid exchange rate regimes would benefit the most from measures to contain excessive credit growth during booms, such as reserve requirements, loan-to-income ratios, and debt-to-income and debt-service-to-income limits.



Managing Capital Flows

Author : Masahiro Kawai

Publisher : Edward Elgar Publishing

Page : 465 pages

File Size : 23,13 MB

Release : 2010-01-01

Category : Business & Economics

ISBN : 184980687X

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Book Description

Managing Capital Flows provides analyses that can help policymakers develop a framework for managing capital flows that is consistent with prudent macroeconomic and financial sector stability. While capital inflows can provide emerging market economies with invaluable benefits in pursuing economic development and growth, they can also pose serious policy challenges for macroeconomic management and financial sector supervision. The expert contributors cover a wide range of issues related to managing capital flows and analyze the experience of emerging Asian economies in dealing with surges in capital inflows. They also discuss possible policy measures to manage capital flows while remaining consistent with the goals of macroeconomic and financial sector stability. Building on this analysis, the book presents options for workable national policies and regional policy cooperation, particularly in exchange rate management. Containing chapters that bring in international experiences relevant to Asia and other emerging market economies, this insightful book will appeal to policymakers in governments and financial institutions, as well as public and private finance experts. It will also be of great interest to advanced students and academic researchers in finance.



Regaining Global Stability After the Financial Crisis

Author : Sergi, Bruno

Publisher : IGI Global

Page : 409 pages

File Size : 33,19 MB

Release : 2018-04-06

Category : Business & Economics

ISBN : 152254027X

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Book Description

The prosperity and stability of any economic structure is reliant upon a foundation of secure systems that regulate the movement of money across the globe. These structures have become an integral part of contemporary society by reducing monetary risk and increasing financial security. Regaining Global Stability After the Financial Crisis is a critical scholarly publication that examines the after-effects of the economic slowdown and the steps that have been taken to overcome the consequences of the slowdown as well as strategies to reduce its impact on economies and societies. Highlighting a wide range of topics including economic convergence, risk management, and public policy for financial stability, this book is geared toward academicians, practitioners, students, managers, and professionals in the financial sector seeking current research on regaining a sense of safety and security after a time of economic crisis.



Effects of Financial Globalization on Developing Countries

Author : Mr.Ayhan Kose

Publisher : International Monetary Fund

Page : 68 pages

File Size : 37,23 MB

Release : 2003-09-03

Category : Business & Economics

ISBN : 9781589062214

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Book Description

This study provides a candid, systematic, and critical review of recent evidence on this complex subject. Based on a review of the literature and some new empirical evidence, it finds that (1) in spite of an apparently strong theoretical presumption, it is difficult to detect a strong and robust causal relationship between financial integration and economic growth; (2) contrary to theoretical predictions, financial integration appears to be associated with increases in consumption volatility (both in absolute terms and relative to income volatility) in many developing countries; and (3) there appear to be threshold effects in both of these relationships, which may be related to absorptive capacity. Some recent evidence suggests that sound macroeconomic frameworks and, in particular, good governance are both quantitatively and qualitatively important in affecting developing countries’ experiences with financial globalization.