Managing the Capital Account
AbstractThe purpose of this paper is to examine the emerging and transition economies’ experience with capital account convertibility, capital account management and capital controls. Overall, the analysis suggests that policies aiming at controlling capital flows have been less effective—in terms of helping achieve their objectives—than claimed by their supporters. An econometric analysis also suggests that restricting capital mobility does not reduce the probability of experiencing a current account reversal. On the other hand, the degree of financial openness does not appear to be related to the intensity with which reversals affect real economic performance.
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Bibliographic InfoPaper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 338.
Date of creation: Dec 2005
Date of revision:
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- Sebastian Edwards & Raul Susmel, 2003. "Interest-Rate Volatility in Emerging Markets," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 328-348, May.
- Salvador ValdÃ©s-Prieto & Marcelo Soto, 1998. "The Effectiveness of Capital Controls: Theory and Evidence from Chile," Empirica, Springer, vol. 25(2), pages 133-164, January.
- De Gregorio, Jose & Edwards, Sebastian & Valdes, Rodrigo O., 2000.
"Controls on capital inflows: do they work?,"
Journal of Development Economics,
Elsevier, vol. 63(1), pages 59-83, October.
- Sebastian Edwards, 1999.
"How Effective Are Capital Controls?,"
Journal of Economic Perspectives,
American Economic Association, vol. 13(4), pages 65-84, Fall.
- Sebastian Edwards, 2000. "Interest Rates, Contagion and Capital Controls," NBER Working Papers 7801, National Bureau of Economic Research, Inc.
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