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Recent Issues in Capital Flows \Trends in Capital Inflows to Japan & Asia and Challenges Ahead \
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Recent Issues in Capital Flows \Trends in Capital Inflows to Japan & Asia and Challenges Ahead \

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  • WASHIMI Kazuaki

    (Bank of Japan)

Abstract

While international capital transactions can improve economic welfare through the efficient allocation of resources across borders, they can also lead to the destabilization of an economy due to sudden reversals of capital flows. Nevertheless, empirical analyses have shown mixed results depending on the countries and transactions on which the analyses have focused, which highlights that there are different effects depending on the type and contents of the capital transaction. This report introduces recent issues in capital flows and summarizes developments in capital inflows to Asia including Japan. From that perspective, in the medium to long term, Japan will continue to face the challenges in attracting inward FDI and maximizing spillover effects for economic growth, while emerging Asian nations need to develop domestic financial markets and manage the impact of excessive volatility of inward portfolio investments.

Suggested Citation

  • WASHIMI Kazuaki, 2020. "Recent Issues in Capital Flows \Trends in Capital Inflows to Japan & Asia and Challenges Ahead \," Bank of Japan Review Series 20-E-4, Bank of Japan.
    • Handle: RePEc:boj:bojrev:rev20e04
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    More about this item

    Keywords

    International Capital Flows; Foreign Direct Investment; Foreign Portfolio Investment;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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