Date of Original Version

5-1998

Type

Response or Comment

Abstract or Description

Between 1990 and 1996, capital inflows to emerging market countries rose from $60 billion to $194 billion. Mexico's problems in 1995 changed the form of these capital transfers. Equity owners learned from their losses. After 1995, portfolio investment declined, but direct investment increased. Banks were bailed out, so they continued to lend. Bank loans rose with direct investment.

Comments

Testimony Prepared for Joint Economic Committee February 24,1998

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