Why is our focus primarily on external financial flows involving only developing and emerging-market countries?
(2) How strong is the case for increased data collection? (3) How much effective policy space do countries have for temporary controls? (4) How strong is the case for revisiting the multilateral framework governing capital flows? (1) Why is our focus primarily on external financial flows involving only developing and emerging-market countries? If we had a broadly agreed answer to this question, it would help to inform our understanding of external flows of capital, in contrast with flows from outside the country. I can think of four reasons for the asymmetry. First, the adverse consequences of internal flows are less significant. This is, perhaps, because second, countries generally have more comprehensive and consistent national prudential regimes. Third, countries have a wider range of mechanisms for managing the adverse consequences of flows within the domestic economy and financial system. Fourth, the costs of controls on internal capital flows are higher and their effectiveness is
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