01739cas a2200241 a 4500 AALejournalIMF005584 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451871678 1018-5941 BD-DhAAL BD-DhAAL Saborowski, Christian. Capital Inflows and the Real Exchange Rate : Can Financial Development Cure the Dutch Disease? / Christian Saborowski. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (42 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 argues that, in improving the efficient allocation of resources, financial sector development could dampen the appreciation effect of capital inflows. Using dynamic panel data techniques, the paper finds that the exchange rate appreciation effect of FDI inflows is indeed attenuated when financial and capital markets are larger and more active. The main implication of these results is that one of the main dangers associated with large capital inflows in emerging markets-the destabilization of macroeconomic management due to a sizeable appreciation of the real exchange rate-can be mitigated partly by developing a deep financial sector. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2009/020 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/020/001.2009.issue-020-en.xml IMF e-Library