Foreign Capital in the Latin American Economies (Inter-American Development Bank) - Tapa blanda

In the early 1990s, foreign capital flowed into some Latin American countries in quantities not witnessed for over a decade. "Foreign Capital in the Latin American Economies" looks at four countries that experienced particularly large inflows: Argentina, Chile, Colombia and Mexico. The country studies measure the economic impact of capital inflows by looking first at their size and cause, with an emphasis on the effect of implementing market-oriented financial and exchange policies. Macroeconomic management of the flows is evaluated by analyzing the role of the real exchange rate, sterilization efforts, the use of direct controls, and other economic policies. Finally, the studies consider the effect of expanded capital resources on investment, which greatly determines how much the inflows contribute to economic growth. In an introductory chapter, the editors compare the experiences of the four countries and make policy recommendations. Since the studies demonstrate there is no single formula for managing increased capital flows, a principal recommendation is that countries develop policies that are specific to the type of resources involved and provide for their efficient absorption, without contributing to macroeconomic instability.