IMF proposes automatic stabilisers to guard against hot money flows
Emerging markets struggling with "unprecedented" volatility in capital inflows can buttress their financial stability efforts by making it easy for their residents to invest overseas, according to research by the International Monetary Fund (IMF).
Chapter four of the IMF's World Economic Outlook, published today, presents evidence that these resident investments are a powerful complement to other policies aimed at coping with capital flows.
In the past, large capital inflows have been absorbed
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