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Capital account regulation as part of the macroeconomic regime: comparing Brazil in the 1990s and 2000s

Author

Listed:
  • Barbara Fritz

    (Professor of Economics, Institute for Latin American Studies, Freie Universität Berlin, Germany)

  • Daniela Magalhães Prates

    (Associate Professor of Economics, University of Campinas, Unicamp, Brazil and CNPq researcher)

Abstract

Capital account regulation (CAR) has experienced profound reconsideration since the global financial crisis. This new debate focuses on the macroeconomic gains of regulating international capital flows in terms of reducing external and financial vulnerability, but it does not consider relevant aspects relating to the context in which these regulations are implemented. In this paper, we undertake a comparative analysis of similar types of CAR applied in Brazil during the 1990s and 2000s. Based on this analysis, we conclude that for the design of CAR, which is relevant for its effectiveness, institutional features of both the financial market and the macroeconomic regime, shaped by macroeconomic constraints, are relevant. For the case of Brazil, we conclude that, contrary to the 2000s, the strong preference given to inflation stabilization in the 1990s, together with high external vulnerability, strongly limited the CAR's design of this period.

Suggested Citation

  • Barbara Fritz & Daniela Magalhães Prates, 2018. "Capital account regulation as part of the macroeconomic regime: comparing Brazil in the 1990s and 2000s," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 15(3), pages 313-334, November.
    • Handle: RePEc:elg:ejeepi:v:15:y:2018:i:3:p313-334
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    Cited by:

    1. André Moreira Cunha & Daniela Magalhães Prates & Pedro Perfeito da Silva, 2020. "External Financial Liberalization and Macroeconomic Performance in Emerging Countries: An Empirical Evaluation of the Brazilian Case," Development and Change, International Institute of Social Studies, vol. 51(5), pages 1225-1245, September.

    More about this item

    Keywords

    macroeconomic regime; capital account regulation; capital flows; emerging economies;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F6 - International Economics - - Economic Impacts of Globalization

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