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What Lessons Can Asia Draw from Capital Controls in Brazil during 2008–2012?

Author

Listed:
  • Jinjarak, Yothin

    (Asian Development Bank Institute)

  • Noy, Ilan

    (Asian Development Bank Institute)

  • Zheng, Huanhuan

    (Asian Development Bank Institute)

Abstract

Driven by waves of foreign capital inflows and outflows, Indonesia, the Republic of Korea, and Thailand—among several other emerging markets—have resorted to capital control policy since 2006. Are capital controls effective? Controls on capital inflows have been experiencing a renaissance since 2008, with several prominent Asian and Latin American countries implementing them. This paper focuses on Brazil, which instituted five changes in its capital account regime over 2008–2011. It concludes that the effectiveness of capital controls should be viewed on a case-by-case basis, together with the political economy considerations, and other policy tools, i.e., foreign exchange intervention.

Suggested Citation

  • Jinjarak, Yothin & Noy, Ilan & Zheng, Huanhuan, 2013. "What Lessons Can Asia Draw from Capital Controls in Brazil during 2008–2012?," ADBI Working Papers 423, Asian Development Bank Institute.
  • Handle: RePEc:ris:adbiwp:0423
    as

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    File URL: http://www.adbi.org/files/2013.05.28.wp423.lessons.asia.draw.capital.controls.brazil.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    capital control; brazil; global financial crisis; mutual fund flows; exchange rate;

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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