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Capital Flows to Brazil: The Endogeneity of Capital Controls

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Author Info
Eliana Cardoso (International Monetary Fund)
Ilan Goldfajn (International Monetary Fund)
Abstract

This paper creates an index of capital controls to analyze the determinants of capital flows to Brazil, accounting for the endogeneity of capital controls by considering a government that sets controls in response to capital flows. It finds that the government reacts strongly to capital flows by increasing controls on inflows during booms and relaxing them in moments for distress. The paper estimates a vector autoregression with capital flows, controls, and interest differentials. It shows that controls have been tempoarily effective in altering levels an composition of capital flows but have had no sustained effects in the long run. Copyright 1998, International Monetary Fund

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File URL: http://www.imf.org/external/pubs/ft/staffp/1998/03-98/pdf/cardoso.pdf
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Publisher Info
Article provided by Palgrave Macmillan Journals in its journal IMF Staff Papers.

Volume (Year): 45 (1998)
Issue (Month): 1 ()
Pages: 6
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:pal:imfstp:v:45:y:1998:i:1:p:6

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Find related papers by JEL classification:
F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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  1. Melike Altinkemer, 2005. "Recent Experiences with Capital Controls : Is There A Lesson for Turkey?," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 5(2), pages 1-38. [Downloadable!]
  2. Nicolas E. Magud & Carmen Reinhart & Kenneth Rogoff, 2007. "Capital controls: myth and reality, a portfolio balance approach to capital controls," Working Paper Series 2007-31, Federal Reserve Bank of San Francisco. [Downloadable!]
    Other versions:
  3. Evan F. Koenig, 2001. "What goes down must come up: understanding time-variation in the NAIRU," Working Papers 0101, Federal Reserve Bank of Dallas. [Downloadable!]
  4. Giuseppe Tullio & Afonso Ferreira, 2000. "Unemployment And The Credibility Of Exchange Rate Pegs: Evidence From The Brazilian Currency Crisis Of January 1999," Departmental Working Papers 134, Tor Vergata University, CEIS. [Downloadable!]
  5. Natalia Tamirisa, 2003. "Trade in Financial Services and Capital Movements," Journal of Financial Services Research, Springer, vol. 24(1), pages 47-66, August. [Downloadable!] (restricted)
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  6. Sweta Saxena & Kar-yiu Wong, 1999. "Currency Crises and Capital Control: A Survey," Discussion Papers in Economics at the University of Washington 0045, Department of Economics at the University of Washington. [Downloadable!]
    Other versions:
  7. Ricardo Ffrench-Davis & Leonardo Villar, . "Real Macroeconomic Stability and the Capital Account in Chile and Colombia," Borradores de Economia 294, Banco de la Republica de Colombia. [Downloadable!]
  8. Nicolas Magud & Carmen M. Reinhart, 2007. "Capital Controls: An Evaluation," NBER Chapters, in: Capital Controls and Capital Flows in Emerging Economies: Policies, Practices and Consequences, pages 645-674 National Bureau of Economic Research, Inc. [Downloadable!]
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  9. Wyplosz, Charles, 2001. "How Risky is Financial Liberalization in the Developing Countries?," CEPR Discussion Papers 2724, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  10. Natalia T. Tamirisa, 2004. "Do Macroeconomic Effects of Capital Controls Vary by Their Type? Evidence from Malaysia," IMF Working Papers 04/3, International Monetary Fund. [Downloadable!]
  11. Frederico Gonzaga Jayme Junior, 2001. "External debt sustainability: empirical evidence in Brazil," Textos para Discussão Cedeplar-UFMG td154, Cedeplar, Universidade Federal de Minas Gerais. [Downloadable!]
  12. Nikolai Flexner, 2003. "Foreign Direct Investment and Economic Growth in Bolivia, 1990- 1998," Macroeconomics 0309009, EconWPA, revised 26 Nov 2003. [Downloadable!]
  13. Leonardo Villar & Ricardo Ffrench-Davis, 2004. "Real Macroeconomic Stability And The Capital Account In Chile And Colombia," BORRADORES DE ECONOMIA 003416, BANCO DE LA REPÚBLICA. [Downloadable!]
  14. William C. Gruben & Darryl McLeod, 2001. "Capital account liberalization and disinflation in the 1990s," Center for Latin America Working Papers 0101, Federal Reserve Bank of Dallas. [Downloadable!]
  15. Apolinar Mesa, 2003. "Emerging Market Disinflation in the 1990s: The Role of Capital Flow," Fordham Economics Dissertations 2003.1, Fordham University, Department of Economics. [Downloadable!]
  16. Ilan Goldfajn & André Minella, 2005. "Capital Flows and Controls in Brazil: What Have We Learned?," NBER Working Papers 11640, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Johnston, R Barry, 1998. "Sequencing Capital Account Liberalizations and Financial Sector Reform," IMF Papers on Policy Analysis and Assessments 98/8, International Monetary Fund. [Downloadable!]
  18. Reinhart, Carmen & Edison, Hali, 2001. "Capital controls during financial crises: The case of Malaysia and Thailand," MPRA Paper 13903, University Library of Munich, Germany. [Downloadable!]
    Other versions:
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