The resumption of capital flows has triggered familiar concerns in EMEs about macroeconomic and financial stability. This has also sparked off a vigorous debate internationally on the policy approach to capital flows at the country level and at the international level.
My comments as chairman of this session will cover the theoretical arguments for and against capital flows, the collective experience to date in managing capital flows and issues on the way forward. I will also allude to India’s approach to capital account management. Arguments for and against capital flows 2. The theoretical arguments in support of capital flows are quite persuasive.