Effectiveness of Capital Controls in Selected Emerging Markets in the 2000's

December 1, 2011

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Format: Chicago

Chikako Baba, and Annamaria Kokenyne. Effectiveness of Capital Controls in Selected Emerging Markets in the 2000's, (USA: International Monetary Fund, 2011) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper estimates the effectiveness of capital controls in response to inflow surges in Brazil, Colombia, Korea, and Thailand in the 2000s. Controls are generally associated with a decrease in inflows and a lengthening of maturities, but the relationship is not statistically significant in all cases, and the effects are temporary. Controls are more successful in providing room for monetary policy than dampening currency appreciation pressures. We argue that the macroeconomic impact of capital controls depends on the extensiveness of the policy, the level of capital market development, the support provided by other policies, and the persistence of capital flows.

Subject: Balance of payments, Business cycles, Capital controls, Capital flows, Capital inflows, Current account balance, Economic growth

Keywords: Business cycles, Capital, Capital control, Capital controls, Capital flows, Capital inflows, Control index, Currency appreciation, Current account balance, Emerging market economies, Global, Inflow control, Interest rate differential, Outflow control index, Outflow control liberalization, Outflow liberalization, Policy in Brazil, Private capital flows, The URR, WP

Publication Details

Pages:

45
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/281
Stock No:

WPIEA2011281
ISBN:

9781463926625
ISSN:

1018-5941

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