Download or read book Economic Effects and Structural Determinants of Capital Controls written by Mr.Vittorio Grilli and published by International Monetary Fund. This book was released on 1995-03 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies determinants and effects of capital controls using a panel of 61 developed and developing countries. The results suggest that capital account restrictions are more likely to be in place in countries with low income, a large share of government, and where the central bank is not independent. Other determinants of controls include the exchange rate regime, current account imbalances and the degree of openness of the economy. We also find that capital controls and other foreign exchange restrictions are associated with higher inflation and lower real interest rates. We do not find any robust correlation between our measures of controls and the rate of growth, although there is evidence that countries with large black market premia grow more slowly.

Download or read book The Political Economy of Capital Controls written by Gunther G. Schulze and published by Cambridge University Press. This book was released on 2000-05-04 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive study of capital controls, assesses the existing literature and presents original research.

Download or read book The Macroeconomic Effects of Capital Controls and the Stabilization of the Balance of Trade written by Mr.Enrique G. Mendoza and published by International Monetary Fund. This book was released on 1990-11-01 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: A dynamic stochastic equilibrium model of a small open economy is used to quantify the macroeconomic effects of introducing capital controls to stabilize the balance of trade. This model focuses on the role of international trade and foreign debt as instruments that help smooth consumption in response to productivity or terms-of-trade disturbances. The model rationalizes some key empirical regularities that characterize business fluctuations and the dynamics of savings and investment in post-war Canada. The results show that capital controls have small effects on both the basic characteristics of macroeconomic fluctuations and the level of welfare. A fiscal strategy that successfully enforces capital controls by introducing taxes on foreign interest income is also studied in some detail.

Download or read book The Economic Effects of Capital Controls written by Everett M. Ehrlich and published by . This book was released on 1985 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Capital Controls and the Cost of Debt written by Eugenia Andreasen and published by International Monetary Fund. This book was released on 2017-06-09 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a panel data set for international corporate bonds and capital account restrictions in advanced and emerging economies, we show that restrictions on capital inflows produce a substantial and economically meaningful increase in corporate bond spreads. A number of heterogeneities suggest that the effect of capital controls on inflows is particularly strong for more financially constrained firms, establishing a novel channel through which capital controls affect economic outcomes. By contrast, we do not find a robust significant effect of restrictions on outflows.

Download or read book Economic Effects of Capital Controls written by and published by . This book was released on 1985 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Capital Controls Exchange Rates and Monetary Policy in the World Economy written by Sebastian Edwards and published by Cambridge University Press. This book was released on 1997-06-13 with total page 452 pages. Available in PDF, EPUB and Kindle. Book excerpt: The essays collected in this volume discuss the impact of increased capital mobility on macroeconomic performance.

Download or read book Controlling Capital Legal Restrictions and the Asset Composition of International Financial Flows written by Mr.Martin Schindler and published by International Monetary Fund. This book was released on 2009-09-01 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: How effective are capital account restrictions? We provide new answers based on a novel panel data set of capital controls, disaggregated by asset class and by inflows/outflows, covering 74 countries during 1995-2005. We find the estimated effects of capital controls to vary markedly across the types of capital controls, both by asset categories, by the direction of flows, and across countries' income levels. In particular, both debt and equity controls can substantially reduce outflows, with little effect on capital inflows, but only high-income countries appear able to effectively impose debt (outflow) controls. The results imply that capital controls can affect both the volume and the composition of capital flows.

Download or read book International Capital Flows Economic Problems and Policy Implications written by Nina Pohl and published by diplom.de. This book was released on 2000-09-01 with total page 207 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inhaltsangabe:Abstract: This paper deals with three highly controversial aspects in the international finance literature: the degree of international financial integration, the economic impact of capital mobility, and the potential role of capital controls in the emerging international financial architecture. Regarding the first aspect, many observers have been influenced by the recent hype about globalisation and in fact take it for granted that capital markets have become almost fully integrated into a world financial marketplace. This paper, reviews evidence that challenges this conventional wisdom, though confirming that the degree of international financial integration is rising. With respect to the second aspect, it is demonstrated that there are circumstances under which the free flow of international capital could negatively impact upon economic performance and/or otherwise welfare-enhancing domestic policies. This finding conflicts with traditional theory and provides an economic rationale for the judicious introduction of capital controls. With this assertion in mind, the final aspect, the role of capital controls, is investigated. The specific question explored is how far restrictions on international capital flows are able to avert a costly economic imbalance arising from fluctuations in the balance of payments. Although the international consensus seems to have shifted in recent years towards promoting Chilean-style capital controls as a potential new building block in the international financial landscape, this paper cautions against such a generalisation of the Chilean experience. Rather, a review of the empirical literature suggests that much of Chile s economic success story in the last decade can be explained by factors other than its control regime. The rising degree of international financial integration enhances the need for small countries to resolve their dilemma of being dependent on external funding and, at the same time, most vulnerable to sudden reversals of international capital flows. Yet, simple solutions of how to counterbalance the potential threats of capital mobility in a second-best equilibrium, are not found to be easily forthcoming. In particular, this paper argues that capital controls are no panacea even less so, if they delay necessary macro- and microeconomic reforms. A worrying feature of the international financial system, partly due to continued innovations in financial engineering, is that [...]

Download or read book International Capital Flows Economic Impact and Policy Implications written by Nina Gillmann and published by GRIN Verlag. This book was released on 2012-08-08 with total page 213 pages. Available in PDF, EPUB and Kindle. Book excerpt: Diploma Thesis from the year 2000 in the subject Economics - Finance, grade: 1, Christian-Albrechts-University of Kiel, language: English, abstract: This paper deals with three highly controversial aspects in the international finance literature: the degree of international financial integration, the economic impact of capital mobility, and the potential role of capital controls in the emerging international financial architecture. Regarding the first aspect, many observers have been influenced by the recent hype about “globalisation” and in fact take it for granted that capital markets have become almost fully integrated into a world financial marketplace. This paper, reviews evidence that challenges this conventional wisdom, though confirming that the degree of international financial integration is rising. With respect to the second aspect, it is demonstrated that there are circumstances under which the free flow of international capital could negatively impact upon economic performance and/or otherwise welfare-enhancing domestic policies. This finding conflicts with traditional theory and provides an economic rationale for the judicious introduction of capital controls. With this assertion in mind, the final aspect, the role of capital controls, is investigated. The specific question explored is how far restrictions on international capital flows are able to avert a costly economic imbalance arising from fluctuations in the balance of payments. Although the international consensus seems to have shifted in recent years towards promoting Chilean-style capital controls as a potential new building block in the international financial landscape, this paper cautions against such a generalisation of the Chilean experience. Rather, a review of the empirical literature suggests that much of Chile‘s economic success story in the last decade can be explained by factors other than its control regime. The rising degree of international financial integration enhances the need for small countries to resolve their dilemma of being dependent on external funding and, at the same time, most vulnerable to sudden reversals of international capital flows. Yet, simple solutions of how to counterbalance the potential threats of capital mobility in a second-best equilibrium, are not found to be easily forthcoming. In particular, this paper argues that capital controls are no panacea – even less so, if they delay necessary macro- and microeconomic reforms.

Download or read book Capital Flight and Capital Controls in Developing Countries written by Gerald A. Epstein and published by Edward Elgar Publishing. This book was released on 2005-01-01 with total page 368 pages. Available in PDF, EPUB and Kindle. Book excerpt: Capital flight - the unrecorded export of capital from developing countries - often represents a significant cost for developing countries. It also poses a puzzle for standard economic theory, which would predict that poorer countries be importers of capital due to its scarcity. This situation is often reversed, however, with capital fleeing poorer countries for wealthier, capital-abundant locales. Using a common methodology for a set of case studies on the size, causes and consequences of capital flight in developing countries, the contributors address the extent of capital flight, its effects, and what can be done to reverse it. Case studies of Brazil, China, Chile, South Africa, Thailand, Turkey and the Middle East provide rich descriptions of the capital flight phenomena in a variety of contexts. The volume includes a detailed description of capital flight estimation methods, a chapter surveying the impact of financial liberalization, and several chapters on controls designed to solve the capital flight problem. The first book devoted to the careful calculation of capital flight and its historical and policy context, this volume will be of great interest to students and scholars in the areas of international finance and economic development.

Download or read book Capital Flow Deflection written by Paolo Giordani and published by International Monetary Fund. This book was released on 2014-08-08 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper focuses on the coordination problem among borrowing countries imposing controls on capital infl ows. In a simple model of capital flows and controls, we show that inflow restrictions distort international capital flows to other countries and that, in turn, such capital flow deflection may lead to a policy response. We then test the theory using data on inflow restrictions and gross capital inflows for a large sample of developing countries between 1995 and 2009. Our estimation yields strong evidence that capital controls deflect capital flows to other borrowing countries with similar economic characteristics. Notwithstanding these strong cross-border spillover effects, we do not find evidence of a policy response.

Download or read book Economic Effects and Structural Determinants of Capital Controls written by Vittorio Grilli and published by . This book was released on 2006 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies determinants and effects of capital controls using a panel of 61 developed and developing countries. The results suggest that capital account restrictions are more likely to be in place in countries with low income, a large share of government, and where the central bank is not independent. Other determinants of controls include the exchange rate regime, current account imbalances and the degree of openness of the economy. We also find that capital controls and other foreign exchange restrictions are associated with higher inflation and lower real interest rates. We do not find any robust correlation between our measures of controls and the rate of growth, although there is evidence that countries with large black market premia grow more slowly.

Download or read book Preemptive Policies and Risk Off Shocks in Emerging Markets written by Ms. Mitali Das and published by International Monetary Fund. This book was released on 2022-01-07 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show that “preemptive” capital flow management measures (CFM) can reduce emerging markets and developing countries’ (EMDE) external finance premia during risk-off shocks, especially for vulnerable countries. Using a panel dataset of 56 EMDEs during 1996–2020 at monthly frequency, we document that countries with preemptive policies in place during the five year window before risk-off shocks experienced relatively lower external finance premia and exchange rate volatility during the shock compared to countries which did not have such preemptive policies in place. We use the episodes of Taper Tantrum and COVID-19 as risk-off shocks. Our identification relies on a difference-in-differences methodology with country fixed effects where preemptive policies are ex-ante by construction and cannot be put in place as a response to the shock ex-post. We control the effects of other policies, such as monetary policy, foreign exchange interventions (FXI), easing of inflow CFMs and tightening of outflow CFMs that are used in response to the risk-off shocks. By reducing the impact of risk-off shocks on countries’ funding costs and exchange rate volatility, preemptive policies enable countries’ continued access to international capital markets during troubled times.

Download or read book Capital Controls and Capital Flows in Emerging Economies written by Sebastian Edwards and published by University of Chicago Press. This book was released on 2009-02-15 with total page 699 pages. Available in PDF, EPUB and Kindle. Book excerpt: Some scholars argue that the free movement of capital across borders enhances welfare; others claim it represents a clear peril, especially for emerging nations. In Capital Controls and Capital Flows in Emerging Economies, an esteemed group of contributors examines both the advantages and the pitfalls of restricting capital mobility in these emerging nations. In the aftermath of the East Asian currency crises of 1997, the authors consider mechanisms that eight countries have used to control capital inflows and evaluate their effectiveness in altering the maturity of the resulting external debt and reducing macroeconomic vulnerability. This volume is essential reading for all those interested in emerging nations and the costs and benefits of restricting international capital flows.

Download or read book Are capital controls a useful instrument of economic policy written by Daniel Detzer and published by GRIN Verlag. This book was released on 2010-07-13 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: Essay from the year 2010 in the subject Economics - Monetary theory and policy, grade: 1,3, Berlin School of Economics and Law, course: International Trade and Monetary Economics, language: English, abstract: “Loose funds may sweep round the world disorganizing all steady business. Nothing is more certain than that the movement of capital funds must be regulated” Keynes, J.M. Already Keynes warned against a free movement of capital. Those warnings were taken seriously by the international community and the IMF allowed in its articles the use of capital controls. The attitude towards those controls changed remarkably during the 1980`s when a general trend towards deregulation occurred. This trend peaked in an attempt to include the purpose of liberalizing capital movements in the Articles of Agreements of the IMF. Coinciding with the Asian Crisis, parts of the academic profession heavily opposed this idea and eventually, some of the fund`s representatives revised their general opposition against capital controls. Nonetheless, in big parts of the academic profession, capital controls carry a negative smack and the ultimate goal of free capital flows is promoted. With the financial crisis, however, capital controls came into vogue again. Recently, Brazil introduced a tax on foreign portfolio investment. Also at the G20 level, ways on how to regulate international capital flows are discussed. Whether this should be seen as a desirable development or not, boils down to the question if capital controls are a useful instrument of economic policy? In general capital controls are any kind of policy that limits or redirects capital account transactions. So, the above mentioned question can be answered by looking at the situation of a fully liberalized capital account with its associated cost and benefits and see if state intervention in form of capital controls would be able to improve the situation. This discussion shall first rest on theoretical considerations and outline possible benefits of free capital flows. Thereafter, an important assumption, namely the Efficient Market Theorem, which allows for the prediction of those benefits, will be discussed. Subsequently, by dropping the EMT and introducing Keynesian uncertainty an alternative scenario is drawn and the effect of capital controls within this framework is examined. After this, some of the empirical research regarding the benefits of free capital flows will be examined and some of the areas where capital controls can play a beneficial role are introduced to the reader. Finally, the insights gained in the course of this paper will be summarized and an answer to the stated question will be given.

Download or read book Capital Controls In Emerging Economies written by Christine P Ries and published by Routledge. This book was released on 2018-02-23 with total page 221 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book looks at situations where a dramatic transformation of the political environment made existing institutions obsolete. It explores the use of capital controls in the reforming economies of the formerly communist countries.