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What Lessons Can Asia Draw from Capital Controls in Brazil during 2008–2012?

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  • Jinjarak, Yothin

    (Asian Development Bank Institute)

  • Noy, Ilan

    (Asian Development Bank Institute)

  • Zheng, Huanhuan

    (Asian Development Bank Institute)

Abstract

Driven by waves of foreign capital inflows and outflows, Indonesia, the Republic of Korea, and Thailand—among several other emerging markets—have resorted to capital control policy since 2006. Are capital controls effective? Controls on capital inflows have been experiencing a renaissance since 2008, with several prominent Asian and Latin American countries implementing them. This paper focuses on Brazil, which instituted five changes in its capital account regime over 2008–2011. It concludes that the effectiveness of capital controls should be viewed on a case-by-case basis, together with the political economy considerations, and other policy tools, i.e., foreign exchange intervention.

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Bibliographic Info

Paper provided by Asian Development Bank Institute in its series ADBI Working Papers with number 423.

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Length: 37 pages
Date of creation: 28 May 2013
Date of revision:
Handle: RePEc:ris:adbiwp:0423

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Keywords: capital control; brazil; global financial crisis; mutual fund flows; exchange rate;

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  1. Marcel Fratzscher, 2011. "Capital Flows, Push versus Pull Factors and the Global Financial Crisis," NBER Chapters, in: Global Financial Crisis National Bureau of Economic Research, Inc.
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  21. Jacques Miniane, 2004. "A New Set of Measures on Capital Account Restrictions," IMF Staff Papers, Palgrave Macmillan, vol. 51(2), pages 4.
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