Exchange and Capital Controls as Barriers to Trade

June 1, 1998

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Format: Chicago

Natalia T. Tamirisa Exchange and Capital Controls as Barriers to Trade, (USA: International Monetary Fund, 1998) accessed November 8, 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 considers the effect of exchange and capital controls on trade in the gravity-equation framework, in which bilateral exports depend on the distance between countries, the countries’ size and wealth, tariff barriers, and exchange and capital controls. The extent of exchange and capital controls is measured by unique indices. In view of the degree to which countries have liberalized their exchange systems, controls on current payments and transfers are found to be a minor impediment to trade, while capital controls significantly reduce exports into developing and transition economies. Thus, further capital account liberalization could significantly foster trade.

Subject: Balance of payments, Capital controls, Exchange restrictions, Exports, Foreign exchange, International trade, Tariffs, Taxes, Trade barriers

Keywords: Bilateral trade flow, Capital controls, Capital controls as well as control, Control, Development, Effectiveness of control, Effects of control, Enforcement of control, Exchange, Exchange controls, Exchange restrictions, Exports, Financing trade, Global, Indices of control, Liberalization of control, Pervasiveness of control, Statistics yearbook, Tariffs, Trade, Trade barriers, Trade in factor, Unmeasured trade distortion, WP

Publication Details

Pages:

19
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1998/081
Stock No:

WPIEA0811998
ISBN:

9781451955194
ISSN:

1018-5941

Notes

Also published in Staff Papers, Vol. 46, No. 1, March 1999.

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