(Institute of Social Sciences, 2016)
Övenç, Gökhan; Aydemir, Resul; 464957; Economics; Ekonomi
Capital inflows can provide substantial benefits for emerging countries at the expense of some risks. Capital inflows can stimulate domestic investment through lending, increase the growth rates of economies and living standards. Also, they supply necessary funds for developing countries so that they can sustain their budget deficits. On the other hand, current account deficits, monetary expansion, market bubbles, lending booms, volatile and short-run flows and exchange rate fluctuations are known to be among some of the observed risks related to capital inflows into emerging economies.