When a central bank changes interest rates, it creates an imbalance in capital flows.
Instead, most hope that controls on short-term capital flows might make them less volatile.
Britain has a much more open economy than America, measured by foreign trade or capital flows.
For most emerging economies, however, intervention is more about coping with volatile capital flows.
Thanks largely to technology and rapid capital flows, the world has become a much smaller place.
And financial uncertainty, together with sharp shifts in risk appetite, has led to volatile capital flows.
Emerging markets' trade problems have been worsened by shifts in capital flows, globalisation's second big plank.
Compared with the mid-1990s, private capital flows to emerging economies have all but collapsed.
Capital flows should improve a country's macroeconomic stewardship by rewarding prudence and punishing profligacy.
Any such fall would probably drive the dollar even lower, triggering further outward capital flows.
But when confidence collapsed, private capital flows to these economies not only stopped but reversed.
The risk for emerging economies that open themselves up to global capital flows is destabilisation.
As capital flows accelerated, the banks were encouraged to bulk up like fitness freaks taking to steroids.
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In a fast-globalising world even countries with strict capital controls saw an increase in actual capital flows.
American innovation and productivity, underscored by low taxes and stable monetary value, have attracted massive capital flows.
"But presently it is important to moderate capital flows, which are getting very copious and abundant, " he said.
Huge capital flows have flooded the economies of many emerging markets, Brazil being one of the worst hit.
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It is true that bailing in might both reduce capital flows to cash-strapped countries and raise their cost.
The challenges posed by volatile cross-border capital flows make institution-building a top priority in all of these countries.
India's high inflation and chunky current-account deficit, financed by capital flows, mark it out from most of Asia.
These beggar thy neighbor policies led to the collapse of world trade and capital flows during the Great Depression.
Speculation that capital flows will surge as insurers bring in cash to for reinsurance payments also played its role.
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The authors focus on the level of capital flows, rather than their composition.
And pinning a nationality on investors is also brave in these days of easy and massive cross-border capital flows.
The continual process of portfolio shifting inevitably leads to greater international capital flows and larger current-account deficits or surpluses.
These pegs, though necessary to tame inflation in the region, proved a liability when capital flows slowed or reversed.
Under the classical gold standard economic growth, international trade and global capital flows flourished with a minimum of state intervention.
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To prevent volatile currency swings, he argues, governments should impose a tax on short-term capital flows especially short-term bank loans.
And free capital flows would inevitably transform the Chinese economy in many ways, almost all of them for the better.
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