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Managing Capital Flows in an Economic Community: The Case of ASEAN Capital account Liberalization


  • Park, Yung Chul

    (Asian Development Bank Institute)

  • Takagi, Shinji

    (Asian Development Bank Institute)


The paper uses the emerging Association of Southeast Asian Nations (ASEAN) Economic Community as a motivation to explore the issue of capital flow management in an economic community. Although there is an increasingly shared view that capital flow management measures should be part of the routine policy toolkit of emerging market economies, the logic of an economic community appears incompatible with extensive controls on capital flows. Substantial, if not complete, capital account liberalization must therefore take place across ASEAN.

Suggested Citation

  • Park, Yung Chul & Takagi, Shinji, 2012. "Managing Capital Flows in an Economic Community: The Case of ASEAN Capital account Liberalization," ADBI Working Papers 378, Asian Development Bank Institute.
  • Handle: RePEc:ris:adbiwp:0378

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    References listed on IDEAS

    1. Peter Blair Henry, 2007. "Capital Account Liberalization: Theory, Evidence, and Speculation," Journal of Economic Literature, American Economic Association, vol. 45(4), pages 887-935, December.
    2. Sushil Bikhchandani & Sunil Sharma, 2001. "Herd Behavior in Financial Markets," IMF Staff Papers, Palgrave Macmillan, vol. 47(3), pages 1-1.
    3. Peter Henry, 2007. "Capital Account Liberalization: Theory, Evidence, and Speculation," Discussion Papers 07-004, Stanford Institute for Economic Policy Research.
    4. M Ayhan Kose & Eswar Prasad & Kenneth Rogoff & Shang-Jin Wei, 2009. "Financial Globalization: A Reappraisal," IMF Staff Papers, Palgrave Macmillan, vol. 56(1), pages 8-62, April.
    5. Ayhan Kose, M. & Prasad, Eswar S. & Taylor, Ashley D., 2011. "Thresholds in the process of international financial integration," Journal of International Money and Finance, Elsevier, vol. 30(1), pages 147-179, February.
    6. Hali J. Edison & Michael W. Klein & Luca Antonio Ricci & Torsten Sl√łk, 2004. "Capital Account Liberalization and Economic Performance: Survey and Synthesis," IMF Staff Papers, Palgrave Macmillan, vol. 51(2), pages 1-2.
    7. Richard N. Cooper, 1999. "Should Capital Controls be Banished?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(1), pages 89-142.
    8. Hahm, Joon-Ho & Mishkin, Frederic S. & Shin, Hyun Song & Shin, Kwanho, 2011. "Macroprudential policies in open emerging economies," Proceedings, Federal Reserve Bank of San Francisco, issue Nov, pages 63-114.
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    Cited by:

    1. Choong Lyol Lee & Shinji Takagi, 2015. "Assessing the Financial Landscape for the Association of Southeast Asian Nations Economic Community, 2015," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 2(1), pages 116-129, January.
    2. Alfredo C. Robles Jr, 2014. "EU Trade in Financial Services with ASEAN, Policy Coherence for Development and Financial Crisis," Journal of Common Market Studies, Wiley Blackwell, vol. 52(6), pages 1324-1341, November.

    More about this item


    managing capital flows; economic community: asean; capital account liberalization; emerging market economies;

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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