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Capital Flows and Controls in Brazil: What Have We Learned?

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  • Ilan Goldfajn
  • André Minella

Abstract

This paper analyzes the relationship between capital account liberalization and macroeconomic volatility using Brazil as a case study. The paper provides several stylized facts regarding the evolution of capital flows and controls in Brazil in the last three decades. We conclude that, notwithstanding the financial crises and macroeconomic volatility of the recent past, capital account liberalization and the floating exchange regime have led to a more resilient economy. Further liberalization of the capital account is warranted and should be accompanied by a broad range of reforms to improve and foster stronger institutions.

Suggested Citation

  • Ilan Goldfajn & André Minella, 2005. "Capital Flows and Controls in Brazil: What Have We Learned?," NBER Working Papers 11640, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:11640
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    1. Sebastian Edwards, 2007. "Capital Controls, Sudden Stops, and Current Account Reversals," NBER Chapters, in: Capital Controls and Capital Flows in Emerging Economies: Policies, Practices, and Consequences, pages 73-120, National Bureau of Economic Research, Inc.
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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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