This article explores the evolution of capital flows to emerging markets over the last 30 years with emphasis on the past decade. Capital markets in emerging-market economies have evolved substantially over the period, becoming increasingly deep and resilient.
The author looks at how capital flows to these countries have changed in terms of magnitude, geographical distribution, the financial instruments used, and the country of origin. He also examines how changes in the investor base have affected these flows and reviews the factors underlying the growth of private capital flows in the 1990s.