Large capital inflows lead to economic growth but risk subsequent downturns.
The article looks at how big money coming into countries affects their economies. They found that when a lot of money comes in, the value of the country's money goes up and their trade balance gets worse. Even though the economy grows faster during these times, it often slows down later. The researchers suggest that keeping government spending stable can help prevent the currency from getting too strong and lead to better growth later on. Trying to stop the country's money from getting stronger through interventions usually doesn't work. And putting restrictions on how much money can come in hasn't really made things better.