How Effective are Capital Controls? Evidence from Malaysia
This paper examines the role of capital controls as a macroeconomic policy tool in light of the Malaysian experience. It consists of an econometric analysis of quarterly data over the period 1990–2010 using newly constructed capital inflow and outflow policy indexes as well as analytical narratives of episodes of controls imposed on inflows (1994) and outflows (1998–1999). The findings suggest that well-targeted controls have the potential to tame both short-term capital inflows and outflows without exerting a backwash effect on foreign direct investment, at least in the short to medium term. Controls on capital inflows introduced in the first half of 1994 helped moderate accumulation of short-term capital flows, particularly short-term bank credit. During 1998–1999, carefully designed temporary capital controls were successful in providing Malaysian policymakers a viable setting for applying the standard Keynesian therapy.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 29 (2012)
Issue (Month): 2 ()
|Contact details of provider:|| Postal: P.O. Box 789, Manila|
Fax: (63-2) 636-2648
Web page: http://www.adb.org
More information through EDIRC
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.:
- Reinhart, Carmen & Montiel, Peter, 1999.
"Do capital controls influence the volume and composition of capital flows? Evidence from the 1990s,"
13710, University Library of Munich, Germany.
- Montiel, Peter & Reinhart, Carmen M., 1999. "Do capital controls and macroeconomic policies influence the volume and composition of capital flows? Evidence from the 1990s," Journal of International Money and Finance, Elsevier, vol. 18(4), pages 619-635, August.
- Kaplan, Ethan & Rodrik, Dani, 2001.
"Did the Malaysian Capital Controls Work?,"
Working Paper Series
rwp01-008, Harvard University, John F. Kennedy School of Government.
- Binici, Mahir & Hutchison, Michael & Schindler, Martin, 2010.
"Controlling capital? Legal restrictions and the asset composition of international financial flows,"
Journal of International Money and Finance,
Elsevier, vol. 29(4), pages 666-684, June.
- Mahir Binici & Michael M. Hutchison & Martin Schindler, 2009. "Controlling Capital? Legal Restrictions and the Asset Composition of International Financial Flows," IMF Working Papers 09/208, International Monetary Fund.
- Anne Krueger & Aaron Tornell, 1999.
"The Role of Bank Restructuring in Recovering from Crises: Mexico 1995-98,"
Harvard Institute of Economic Research Working Papers
1872, Harvard - Institute of Economic Research.
- Anne Krueger & Aaron Tornell, 1999. "The Role of Bank Restructuring in Recovering from Crises: Mexico 1995-98," NBER Working Papers 7042, National Bureau of Economic Research, Inc.
- Reinhart, Carmen & Edison, Hali, 2001.
"Stopping hot money,"
13862, University Library of Munich, Germany.
- Prema-chandra Athukorala, 2003. "FDI in Crisis and Recovery: Lessons from the 1997-98 Asian Crisis," Departmental Working Papers 2003-04, The Australian National University, Arndt-Corden Department of Economics.
- Akira Ariyoshi & Andrei A Kirilenko & Inci Ã–tker & Bernard J Laurens & Jorge I Canales Kriljenko & Karl F Habermeier, 2000. "Capital Controls; Country Experiences with Their Use and Liberalization," IMF Occasional Papers 190, International Monetary Fund.
- Ashoka Mody & Antu Panini Murshid, 2002.
"Growing Up with Capital Flows,"
IMF Working Papers
02/75, International Monetary Fund.
- Prema-chandra Athukorala, 2010. "Malaysian Economy in Three Crises," Departmental Working Papers 2010-12, The Australian National University, Arndt-Corden Department of Economics.
- Martin Schindler, 2009. "Measuring Financial Integration: A New Data Set," IMF Staff Papers, Palgrave Macmillan, vol. 56(1), pages 222-238, April.
When requesting a correction, please mention this item's handle: RePEc:ris:adbadr:2745. 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: (Maria Susan M. Torres)
If references are entirely missing, you can add them using this form.