Capital Controls: An Evaluation
The literature on capital controls has (at least) four very serious apples-to-oranges problems: (i) There is no unified theoretical framework to analyze the macroeconomic consequences of controls; (ii) there is significant heterogeneity across countries and time in the control measures implemented; (iii) there are multiple definitions of what constitutes a Â“successÂ” and (iv) the empirical studies lack a common methodologyÂ—furthermore these are significantly Â“overweightedÂ” by a couple of country cases (Chile and Malaysia). In this paper, we attempt to address some of these shortcomings by: being very explicit about what measures are construed as capital controls. Also, given that success is measured so differently across studies, we sought to Â“standardizeÂ” the results of over 30 empirical studies we summarize in this paper. The standardization was done by constructing two indices of capital controls: Capital Controls Effectiveness Index (CCE Index), and Weighted Capital Control Effectiveness Index (WCCE Index). The difference between them lies only in that the WCCE controls for the differentiated degree of methodological rigor applied to draw conclusions in each of the considered papers. Inasmuch as possible, we bring to bear the experiences of less well known episodes than those of Chile and Malaysia.
|Date of creation:||01 Jun 2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (541) 346-4661
Fax: (541) 346-1243
Web page: http://economics.uoregon.edu/
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.:
- 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.
- Reinhart, Carmen & Smith, R. Todd, 1998.
"Too much of a good thing: The macroeconomic effects of taxing capital inflows,"
13234, University Library of Munich, Germany.
- Carmen M. Reinhart & R. Todd Smith, 1996. "Too much of a good thing: the macroeconomic effects of taxing capital inflows," Proceedings, Federal Reserve Bank of San Francisco, pages 436-464.
- Chanda, Areendam, 2005.
"The influence of capital controls on long run growth: Where and how much?,"
Journal of Development Economics,
Elsevier, vol. 77(2), pages 441-466, August.
- Areendam Chanda, 2002. "The Influence of Capital Controls on Long Run Growth: Where and How Much?," International Finance 0201001, EconWPA.
- Forbes, Kristin J., 2003.
"One Cost of the Chilean Capital Controls: Increased Financial Constraints for Smaller Traded Firms,"
4273-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Forbes, Kristin J., 2007. "One cost of the Chilean capital controls: Increased financial constraints for smaller traded firms," Journal of International Economics, Elsevier, vol. 71(2), pages 294-323, April.
- Kristin J. Forbes, 2003. "One Cost of the Chilean Capital Controls: Increased Financial Constraints for Smalles Traded Firms," NBER Working Papers 9777, National Bureau of Economic Research, Inc.
- Reinhart, Carmen & Smith, R Todd, 2002.
"Temporary controls on capital inflows,"
13863, University Library of Munich, Germany.
- Guillermo A. Calvo & Leonardo Leiderman & Carmen M. Reinhart, 1994.
"The Capital Inflows Problem: Concepts And Issues,"
Contemporary Economic Policy,
Western Economic Association International, vol. 12(3), pages 54-66, 07.
- Natalia T. Tamirisa, 2004. "Do Macroeconomic Effects of Capital Controls Vary by their Type? Evidence From Malaysia," IMF Working Papers 04/3, International Monetary Fund.
- Jacques Miniane & John H. Rogers, 2003.
"Capital controls and the international transmission of U.S. money shocks,"
International Finance Discussion Papers
778, Board of Governors of the Federal Reserve System (U.S.).
- Jacques Miniane & John H. Rogers, 2007. "Capital Controls and the International Transmission of U.S. Money Shocks," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(5), pages 1003-1035, 08.
- Kaplan, Ethan & Rodrik, Dani, 2001.
"Did the Malaysian Capital Controls Work?,"
Working Paper Series
rwp01-008, Harvard University, John F. Kennedy School of Government.
- Reinhart, Carmen & Edison, Hali, 2001.
"Stopping hot money,"
13862, University Library of Munich, Germany.
- Francisco Gallego & Leonardo Hernández & Klaus Schmidt-Hebbel, 1999.
"Capital Controls in Chile: Effective? Efficient?,"
Working Papers Central Bank of Chile
59, Central Bank of Chile.
- Francisco A. Gallego & Leonardo Hernandez & Klaus Schmidt-Hebbel, 2000. "Capital Controls in Chile: Effective? Efficient?," Econometric Society World Congress 2000 Contributed Papers 0330, Econometric Society.
- 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.
- Sebastian Edwards, 1999.
"How Effective Are Capital Controls?,"
Journal of Economic Perspectives,
American Economic Association, vol. 13(4), pages 65-84, Fall.
- Guillermo A. Calvo & Carmen M. Reinhart, 2002.
"Fear Of Floating,"
The Quarterly Journal of Economics,
MIT Press, vol. 117(2), pages 379-408, May.
- James Tobin, 1978.
"A Proposal for International Monetary Reform,"
Cowles Foundation Discussion Papers
506, Cowles Foundation for Research in Economics, Yale University.
- Reinhart, Carmen & Reinhart, Vincent, 1998. "“Some Lessons for Policy Makers Who Deal with the Mixed Blessing of Capital Inflows,”," MPRA Paper 7123, University Library of Munich, Germany.
- Natalia T. Tamirisa & R. B. Johnston, 1998. "Why Do Countries Use Capital Controls?," IMF Working Papers 98/181, International Monetary Fund.
- Carmen M. Reinhart & Kenneth S. Rogoff & Miguel A. Savastano, 2003.
NBER Working Papers
9908, National Bureau of Economic Research, Inc.
- Mihir A. Desai & C. Fritz Foley & James R. Hines Jr., 2004.
"Capital Controls, Liberalizations, and Foreign Direct Investement,"
NBER Working Papers
10337, National Bureau of Economic Research, Inc.
- Mihir A. Desai & C. Fritz Foley & James R. Hines, 2006. "Capital Controls, Liberalizations, and Foreign Direct Investment," Review of Financial Studies, Society for Financial Studies, vol. 19(4), pages 1433-1464.
- Akira Ariyoshi & Andrei Kirilenko & Inci Ã–tker & Bernard Laurens & Jorge IvÃ¡n Canales Kriljenko & Karl Friedrich Habermeier, 2000. "Capital Controls; Country Experiences with Their Use and Liberalization," IMF Occasional Papers 190, International Monetary Fund.
- Isriya Nitithanprapas & Sunil Rongala & Thomas D. Willett, 2002. "The Role of Capital Controls and Currency Regimes in the Asian Crisis," Claremont Colleges Working Papers 2002-21, Claremont Colleges.
- Sebastian Edwards & Roberto Rigobon, 2005. "Capital Controls, Exchange Rate Volatility and External Vulnerability," NBER Working Papers 11434, National Bureau of Economic Research, Inc.
- Bernard Laurens & Jaime Cardoso, 1998. "Managing Capital Flows; Lessons From the Experience of Chile," IMF Working Papers 98/168, International Monetary Fund.
- Rudi Dornbusch, 2001. "Malaysia: Was it Different?," NBER Working Papers 8325, National Bureau of Economic Research, Inc.
- Eliana Cardoso & Ilan Goldfajn, 1998.
"Capital Flows to Brazil: The Endogeneity of Capital Controls,"
IMF Staff Papers,
Palgrave Macmillan, vol. 45(1), pages 161-202, March.
- Eliane A. Cardoso & Ilan Goldfajn, 1997. "Capital Flows to Brazil-The Endogeneity of Capital Controls," IMF Working Papers 97/115, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:ore:uoecwp:2005-19. 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: (Bill Harbaugh)
If references are entirely missing, you can add them using this form.