Rethinking the Economics of Capital Mobilityand Capital Controls
This paper reexamines the issue of international financial capital mobility, which is today's economic orthodoxy. Discussion is often framed in terms of the impossible trinity. That framing distorts discussion by representing capital mobility as having equal significance with sovereign monetary policy and control over exchange rates. It also distorts discussion by ignoring possibilities for coordinated monetary policy and exchange rates, and for managed capital flows. The case for capital mobility rests on neo-classical economic efficiency arguments and neo-liberal political arguments. The case against capital mobility is based on Keynesian macroeconomic inefficiency arguments, neo-Walrasian market failure arguments, and neo-Marxian arguments regarding distortion of the social structure of accumulation. Close examination shows the case for capital mobility to be extremely flimsy, pointing to the ideological dimension behind today's policy orthodoxy.
|Date of creation:||2009|
|Date of revision:|
|Contact details of provider:|| Postal: Hans-Böckler-Straße 39, 40476 Düsseldorf|
Phone: +49 211 7778 234
Fax: +49 211 7778 4234
Web page: http://www.imk-boeckler.de
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.:
- Thomas Palley, 2008.
"The Economics of Outsourcing: How Should Policy Respond?,"
Review of Social Economy,
Taylor & Francis Journals, vol. 66(3), pages 279-295.
- Thomas I. Palley, 2007. "The Economics of Outsourcing: How Should Policy Respond?," Economics Public Policy Brief Archive ppb_89, Levy Economics Institute.
- M. Ayhan Kose & Eswar Prasad & Kenneth Rogoff & Shang-Jin Wei, 2009.
"Financial Globalization: A Reappraisal,"
Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 56(2), pages 143-197, June.
- Kose, Ayhan & Prasad, Eswar & Rogoff, Kenneth & Wei, Shang-Jin, 2006. "Financial Globalization: A Reappraisal," CEPR Discussion Papers 5842, C.E.P.R. Discussion Papers.
- Ayhan Kose & Eswar Prasad & Kenneth Rogoff & Shang-Jin Wei, 2006. "Financial Globalization; A Reappraisal," IMF Working Papers 06/189, International Monetary Fund.
- M. Ayhan Kose & Eswar Prasad & Kenneth S. Rogoff & Shang-Jin Wei, 2006. "Financial Globalization: A Reappraisal," NBER Working Papers 12484, National Bureau of Economic Research, Inc.
- Bernardo S. de M. Carvalho & Márcio G. P. Garcia, 2006.
"Ineffective Controls On Capital Inflows Under Sophisticated Financial Markets: Brazil In The Nineties,"
Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting]
58, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
- Bernardo S. de M. Carvalho & Márcio G. P. Garcia, 2008. "Ineffective Controls on Capital Inflows under Sophisticated Financial Markets: Brazil in the Nineties," NBER Chapters, in: Financial Markets Volatility and Performance in Emerging Markets, pages 29-96 National Bureau of Economic Research, Inc.
- Márcio Gomes Pinto Garcia & Bernando S. de M. Carvalho, 2006. "Ineffective controls on capital inflows under sophisticated financial markets: Brazil in the nineties," Textos para discussão 516, Department of Economics PUC-Rio (Brazil).
- Bernardo S. de M. Carvalho & Márcio G.P. Garcia, 2006. "Ineffective Controls on Capital Inflows Under Sophisticated Financial Markets: Brazil in the Nineties," NBER Working Papers 12283, National Bureau of Economic Research, Inc.
- Thomas I. Palley, 2003. "The Economics of Exchange Rates and the Dollarization Debate : The Case Against Extremes," International Journal of Political Economy, M.E. Sharpe, Inc., vol. 33(1), pages 61-82, April.
- Colin I. BRADFORD, Jr., 2005. "Prioritizing Economic Growth: Enhancing Macroeconomic Policy Choice," G-24 Discussion Papers 37, United Nations Conference on Trade and Development.
- Jose De Gregorio & Sebastian Edwards & Rodrigo O. Valdes, 2000.
"Controls on Capital Inflows: Do they Work?,"
NBER Working Papers
7645, National Bureau of Economic Research, Inc.
- J. Bradford De Long & Andrei Shleifer & Lawrence H. Summers & Robert J. Waldmann, .
"Noise Trader Risk in Financial Markets,"
J. Bradford De Long's Working Papers
_124, University of California at Berkeley, Economics Department.
- Palley, Thomas I., 2008. "Keynesian models of deflation and depression revisited," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 167-177, October.
- Sebastian Edwards & Roberto Rigobon, 2005. "Capital Controls, Exchange Rate Volatility and External Vulnerability," NBER Working Papers 11434, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:imk:wpaper:01-2009. 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: (Sabine Nemitz)
If references are entirely missing, you can add them using this form.