Can Short-Term Capital Controls Promote Capital Inflows
AbstractIn an economy à la Diamond and Dybvig (1983), we present an example in which foreign lenders find it profitable to invest in an emerging market if, and only if, the emerging market government imposes taxes on short-term capital inflows. This implies that capital controls that are effective in reducing the vulnerability of emerging markets to financial crises may increase the volume of capital inflows.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2011.
Date of creation: Nov 1998
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Other versions of this item:
- Cordella, Tito, 2003. "Can short-term capital controls promote capital inflows?," Journal of International Money and Finance, Elsevier, vol. 22(5), pages 737-745, October.
- Tito Cordella, 1998. "Can Short-Term Capital Controls Promote Capital Inflows?," IMF Working Papers 98/131, International Monetary Fund.
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
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