Reducing vulnerability to external financial shocks at the country level

摘要

Promoting proactive capital-account management may be one element in a revised governance structure that could give countries sufficient flexibility to manage their domestic macroeconomic policies and improve their prospects for economic stability. Effective capital-account management not only helps prevent volatile private capital flows from causing exchange-rate volatility and misalignment, and thereby destabilizing the domestic financial system; it also helps improve the reliability of price signals in domestic markets and the conditions for efficient resource allocation and dynamic investment.