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Currency Crisis: Where Do We Go From Here?


  • Lamberte, Mario B.


This paper reviews the arguments for and against the imposition of capital controls in the Philippines and discusses the liberalization process undertaken by the authorities since the 1980s. The view espoused by this paper is that there is no need to impose selective capital control in the Philippines similar to that of Chile. However, to make the country less vulnerable to a currency crisis similar to that of the Southeast Asian currency crisis, the paper recommends three major measures: adoption of a flexible exchange rate; improvement of corporate governance; and strengthening of the banking system by improving prudential regulations to make it resilient in the face of sudden changes in investors’ confidence.

Suggested Citation

  • Lamberte, Mario B., 1999. "Currency Crisis: Where Do We Go From Here?," Discussion Papers DP 1999-10, Philippine Institute for Development Studies.
  • Handle: RePEc:phd:dpaper:dp_1999-10

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    References listed on IDEAS

    1. Sachs, Jeffrey D., 1998. "Creditor panics: Causes and remedies," Research Notes 98-4, Deutsche Bank Research.
    2. 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.
    3. Sebastian Edwards, 2000. "Capital Flows, Real Exchange Rates, and Capital Controls: Some Latin American Experiences," NBER Chapters,in: Capital Flows and the Emerging Economies: Theory, Evidence, and Controversies, pages 197-246 National Bureau of Economic Research, Inc.
    4. Reinhart, Carmen M. & Smith, R. Todd, 2002. "Temporary controls on capital inflows," Journal of International Economics, Elsevier, vol. 57(2), pages 327-351, August.
    5. Corsetti, Giancarlo & Pesenti, Paolo & Roubini, Nouriel, 1999. "What caused the Asian currency and financial crisis?," Japan and the World Economy, Elsevier, vol. 11(3), pages 305-373, October.
    6. Lamberte, Mario B., 1994. "Managing Surges in Capital Inflows: The Philippines Case," Discussion Papers DP 1994-20, Philippine Institute for Development Studies.
    7. Alwyn Young, 1992. "A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore," NBER Chapters,in: NBER Macroeconomics Annual 1992, Volume 7, pages 13-64 National Bureau of Economic Research, Inc.
    8. Steven Radelet & Jeffrey Sachs, 1998. "The Onset of the East Asian Financial Crisis," NBER Working Papers 6680, National Bureau of Economic Research, Inc.
    9. Helmut Reisen, 1998. "Domestic Causes of Currency Crises: Policy Lessons for Crisis Avoidance," OECD Development Centre Working Papers 136, OECD Publishing.
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    Asian financial crisis; capital controls;


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