Capital Controls: When and Why?
How should emerging market countries handle surges in capital inflows that may pose both prudential and macroeconomic policy challenges? We review the arguments on the appropriate management of inflow surges and discuss the conditions under which controls on capital inflows may be appropriate. We argue that if the economy is operating near potential, if reserves are adequate, if the exchange rate is not undervalued, and if the flows are likely to be transitory, then controls on capital inflows—together with macroeconomic policy adjustment and prudential measures—may usefully form part of the policy toolkit.
Volume (Year): 59 (2011)
Issue (Month): 3 (August)
|Contact details of provider:|| Web page: http://www.palgrave-journals.com/|
Web page: http://www.imf.org/external/index.htm
|Order Information:||Web: http://www.springer.com/economics/journal/41308/PS2|
When requesting a correction, please mention this item's handle: RePEc:pal:imfecr:v:59:y:2011:i:3:p:562-580. 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: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.