Contagious Policies: An Analysis of Spatial Interactions Among Countries' Capital Account Policies
AbstractCountries' capital account policies might be contagious in the sense that domestic policies are driven by other countries' policies. A model of strategic interactions is developed to show that countries' best response to policy changes elsewhere consists in imitating this policy. Using a spatial econometric model, the hypothesis of policy interactions is tested in a large panel data set. The evidence shows that capital account policies are contemporaneously correlated across countries. Concerning fundamentals, the move to a fixed exchange rate regime and an increase in real world interest rates are correlated with the imposition of capital account restrictions. --
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Bibliographic InfoPaper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Hannover 2010 with number 41.
Date of creation: 2010
Date of revision:
Capital Controls; Strategic Interaction; Panel Data Analysis;
Other versions of this item:
- Andreas Steiner, 2010. "Contagious Policies: An Analysis Of Spatial Interactions Among Countries' Capital Account Policies," Pacific Economic Review, Wiley Blackwell, vol. 15(3), pages 422-445, 08.
- Andreas Steiner, 2010. "Contagious Policies: An Analysis of Spatial Interactions Among Countries’ Capital Account Policies," Working Papers 80, Institute of Empirical Economic Research.
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F3 - International Economics - - International Finance
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
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