Controls on capital inflows and the transmission of external shocks
AbstractIn this paper we attempt to analyse whether price-based controls on capital inflows are successful in insulating economies against external shocks. We present results from vector autoregressive (VAR) models, which indicate that Chile and Colombia, countries that adopted controls on capital inflows, seem to have been relatively well insulated against certain types of external disturbances. Subsequently, we use the autoregressive distributive lag (ARDL) approach to co-integration in order to isolate the effects of the capital controls on the pass-through of external disturbances to domestic interest rates in those economies. We conclude that there is evidence that the capital controls have allowed for greater policy autonomy. Copyright The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Cambridge Journal of Economics.
Volume (Year): 34 (2010)
Issue (Month): 1 (January)
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Other versions of this item:
- Antonio C. David, 2008. "Controls on capital inflows and the transmission of external shocks," Cambridge Journal of Economics, Oxford University Press, vol. 32(6), pages 887-906, November.
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- Jorg Bibow, 2011. "Permanent and Selective Capital Account Management Regimes as an Alternative to Self-Insurance Strategies in Emerging-market Economies," Economics Working Paper Archive wp_683, Levy Economics Institute, The.
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