01768cas a2200253 a 4500 AALejournalIMF003367 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451978827 1018-5941 BD-DhAAL BD-DhAAL Ghosh, Atish. Do Capital Flows Reflect Economic Fundamentals in Developing Countries? / Atish Ghosh, Jonathan Ostry. Washington, D.C. : International Monetary Fund, 1993. 1 online resource (46 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper proposes a methodology for testing whether capital flows to developing countries are determined by economic fundamentals or by purely speculative forces. We use the intertemporal optimizing approach to current account determination as our benchmark for judging the behavior of capital flows. According to this approach, capital flows should act as a buffer to smooth consumption in the face of temporary shocks to national cash flow, defined as output less investment less government expenditures. The results are encouraging. For a large sample of developing countries, economic fundamentals are indeed found to be the most important determinant of capital flows. Mode of access: Internet Ostry, Jonathan. IMF Working Papers; Working Paper ; No. 1993/034 Full text available on IMF http://elibrary.imf.org/view/journals/001/1993/034/001.1993.issue-034-en.xml IMF e-Library