Advanced Search
MyIDEAS: Login to save this paper or follow this series

Capital Flows, Real Exchange Rates, and Capital Controls: Some Latin American Experiences

Contents:

Author Info

  • Sebastian Edwards

Abstract

This paper deals with some of the most important aspects of Latin America's experience with capital flows during the last twenty-five years. The paper begins with a historical analysis. I then deal with the sequencing of reform and discuss issues related to the relationship between capital flows, real exchange rates, and international competitiveness. I next concentrate on the role of capital controls as a device for isolating emerging economies from the volatility of international capital markets. I begin by reviewing the policy issues and the current debate on the subject. I then present an empirical analysis of Chile's recent experiences with capital controls and make some comparisons to the recent experiences of Columbia. The analysis of the Chilean experience is particularly important since its practice of imposing reserves requirements on capital inflows has been praised by a number of analysts, including senior staff of the multilateral institutions, as an effective and efficient way of reducing the vulnerability associated with capital flows volatility. The results obtained suggest that capital controls in Chile have had mixed results: while they have allowed the Central Bank to have a greater degree of control over short term interest rates, they have failed in avoiding real exchange rate appreciation. The paper ends with some reflections, based on recent Latin American historical episodes, on the role of banks in intermediating capital inflows and on financial crises.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.nber.org/papers/w6800.pdf
Download Restriction: no

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6800.

as in new window
Length:
Date of creation: Nov 1998
Date of revision:
Publication status: published as Capital Flows, Real Exchange Rates, and Capital Controls: Some Latin American Experiences , Sebastian Edwards. in Capital Flows and the Emerging Economies: Theory, Evidence, and Controversies , Edwards. 2000
Handle: RePEc:nbr:nberwo:6800

Note: IFM ITI
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Michael P. Dooley, 1998. "A model of crises in emerging markets," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 630, Board of Governors of the Federal Reserve System (U.S.).
  2. Carlos BudnevichA & Guillermo Le Fort, 1997. "Capital Account Regulations and Macroeconomic Policy: Two Latin American Experiences," Working Papers Central Bank of Chile, Central Bank of Chile 06, Central Bank of Chile.
  3. Reinhart, Carmen & Calvo, Guillermo & Leiderman, Leonardo, 1992. "Capital Inflows and Real Exchange Rate Appreciation in Latin America," MPRA Paper 13843, University Library of Munich, Germany.
  4. Michael P. Dooley, 1995. "A Survey of Academic Literatureon Controls Over International Capital Transactions," IMF Working Papers 95/127, International Monetary Fund.
  5. Montiel, Peter J., 1993. "Capital mobility in developing countries : some measurement issues and empirical estimates," Policy Research Working Paper Series 1103, The World Bank.
  6. Reinhart, Carmen & Calvo, Sara, 1996. "Capital Flows to Latin America: Is There Evidence of Contagion Effects?”," MPRA Paper 7124, University Library of Munich, Germany.
  7. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 90(358), pages 314-29, June.
  8. Rudiger Dornbusch & Alejandro Werner, 1994. "Mexico: Stabilization, Reform, and No Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1), pages 253-316.
  9. Reisen, Helmut & Yeches, Helene, 1993. "Time-varying estimates on the openness of the capital account in Korea and Taiwan," Journal of Development Economics, Elsevier, Elsevier, vol. 41(2), pages 285-305, August.
  10. Kevin Cowan & José De Gregorio, 1997. "Exchange Rate Policies and Capital Account Management: Chile in the 1990s," Documentos de Trabajo, Centro de Economía Aplicada, Universidad de Chile 22, Centro de Economía Aplicada, Universidad de Chile.
  11. Rudiger Dornbusch, 1988. "Our LDC Debts," NBER Working Papers 2138, National Bureau of Economic Research, Inc.
    • Rudiger Dornbusch & Thomas S. Johnson & Anne O. Krueger, 1988. "Our LDC Debts," NBER Chapters, in: The United States in the World Economy, pages 161-214 National Bureau of Economic Research, Inc.
  12. Reinhart, Carmen & Calvo, Guillermo & Leiderman, Leonardo, 1993. "“Capital Inflows and Real Exchange Rate Appreciation in Latin America: The Role of External Factors," MPRA Paper 7125, University Library of Munich, Germany.
  13. Edwards, Sebastian, 1996. "Why are Latin America's savings rates so low? An international comparative analysis," Journal of Development Economics, Elsevier, Elsevier, vol. 51(1), pages 5-44, October.
  14. McKinnon, Ronald I., 1982. "The order of economic liberalization: Lessons from Chile and Argentina," Carnegie-Rochester Conference Series on Public Policy, Elsevier, Elsevier, vol. 17(1), pages 159-186, January.
  15. Guillermo A. Calvo, 1991. "The Perils of Sterilization," IMF Staff Papers, Palgrave Macmillan, vol. 38(4), pages 921-926, December.
  16. Dooley, Michael P, 1996. "Capital Controls and Emerging Markets," International Journal of Finance & Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 1(3), pages 197-205, July.
  17. Rudger Dornbusch & Ilan Goldfajn & Rodrigo O. Valdés, 1995. "Currency Crises and Collapses," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(2), pages 219-294.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:6800. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.