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Effectiveness of Capital Controls: Gates versus Walls

Author

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  • Yang Zhou

    (Graduate School of Economics, Nagoya City University and Junior Research Fellow, Research Institute for Economics & Business Administration (RIEB), Kobe University, JAPAN)

  • Shigeto Kitano

    (Research Institute for Economics and Business Administration (RIEB), Kobe University, JAPAN)

Abstract

This study analyzes the effectiveness of capital controls on international debt flows using data of 81 economies, including both advanced and emerging economies, over the period from 1995 to 2019. The analysis using the total sample shows that the impulse responses of capital controls are in the expected directions, although they are barely statistically significant. Making various distinctions among samples (such as advanced and emerging economies and pre- and post-crisis periods) does not necessarily improve our result in most cases compared to the total sample case. However, the distinction between the "gate" and "wall" economies indicates that the effectiveness of capital controls is most relevant for the "wall" emerging economies.

Suggested Citation

  • Yang Zhou & Shigeto Kitano, 2022. "Effectiveness of Capital Controls: Gates versus Walls," Discussion Paper Series DP2022-38, Research Institute for Economics & Business Administration, Kobe University, revised Jan 2026.
    • Handle: RePEc:kob:dpaper:dp2022-38
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • E69 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Other
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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