Rethinking the Economics of Capital Mobility and Capital Controls
This Working Paper reexamines the issue of international financial capital mobility, which has become today’s economic orthodoxy. The policy discussion is often framed in terms of the impossible trinity. That framing distorts discussion by representing capital mobility as having equal significance with sovereign monetary policy and control over exchange rates. It also distorts discussion by ignoring possibilities for coordinated monetary policy and exchange rates, and for managed capital flows. The case for capital mobility rests on neo-classical economic efficiency arguments and neo-liberal political arguments. The case against capital mobility is based on Keynesian macroeconomic inefficiency arguments, neo-Walrasian market failure arguments, and neo-Marxian arguments regarding distortion of the social structure of accumulation. Close examination shows the case for capital mobility to be extremely flimsy. That points to the ideological dimension behind today’s policy orthodoxy.
|Date of creation:||2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (413) 545-6355
Fax: (413) 545-2921
Web page: http://www.peri.umass.edu/
More information through EDIRC
References listed on IDEAS
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.:
- M. Ayhan Kose & Eswar Prasad & Kenneth S. Rogoff & Shang-Jin Wei, 2006.
"Financial Globalization: A Reappraisal,"
NBER Working Papers
12484, National Bureau of Economic Research, Inc.
- M. Ayhan Kose & Eswar Prasad & Kenneth Rogoff & Shang-Jin Wei, 2009. "Financial Globalization: A Reappraisal," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 56(2), pages 143-197, June.
- 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.
- Kose, Ayhan & Prasad, Eswar & Rogoff, Kenneth & Wei, Shang-Jin, 2006. "Financial Globalization: A Reappraisal," CEPR Discussion Papers 5842, C.E.P.R. Discussion Papers.
- M. Ayhan Kose & Eswar Prasad & Kenneth Rogoff & Shang-Jin Wei, 2006. "Financial Globalization; A Reappraisal," IMF Working Papers 06/189, International Monetary Fund.
- Márcio Gomes Pinto Garcia & Bernando S. de M. Carvalho, 2006.
"Ineffective controls on capital inflows under sophisticated financial markets: Brazil in the nineties,"
Textos para discussão
516, Department of Economics PUC-Rio (Brazil).
- Bernardo S. de M. Carvalho & Márcio G. P. Garcia, 2008. "Ineffective Controls on Capital Inflows under Sophisticated Financial Markets: Brazil in the Nineties," NBER Chapters, in: Financial Markets Volatility and Performance in Emerging Markets, pages 29-96 National Bureau of Economic Research, Inc.
- Bernardo S. de M. Carvalho & Márcio G. P. Garcia, 2006. "Ineffective Controls On Capital Inflows Under Sophisticated Financial Markets: Brazil In The Nineties," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 58, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
- Bernardo S. de M. Carvalho & Márcio G.P. Garcia, 2006. "Ineffective Controls on Capital Inflows Under Sophisticated Financial Markets: Brazil in the Nineties," NBER Working Papers 12283, National Bureau of Economic Research, Inc.
- 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.
- De Long, J Bradford & Andrei Shleifer & Lawrence H. Summers & Robert J. Waldmann, 1990.
"Noise Trader Risk in Financial Markets,"
Journal of Political Economy,
University of Chicago Press, vol. 98(4), pages 703-38, August.
- J. Bradford De Long & Andrei Shleifer & Lawrence H. Summers & Robert J. Waldmann, . "Noise Trader Risk in Financial Markets," J. Bradford De Long's Working Papers _124, University of California at Berkeley, Economics Department.
- De Long, J. Bradford & Shleifer, Andrei & Summers, Lawrence H. & Waldmann, Robert J., 1990. "Noise Trader Risk in Financial Markets," Scholarly Articles 3725552, Harvard University Department of Economics.
- Thomas I. Palley, 2003. "The Economics of Exchange Rates and the Dollarization Debate : The Case Against Extremes," International Journal of Political Economy, M.E. Sharpe, Inc., vol. 33(1), pages 61-82, April.
- Thomas I. Palley, 2007.
"The Economics of Outsourcing: How Should Policy Respond?,"
Economics Public Policy Brief Archive
ppb_89, Levy Economics Institute.
- Thomas Palley, 2008. "The Economics of Outsourcing: How Should Policy Respond?," Review of Social Economy, Taylor & Francis Journals, vol. 66(3), pages 279-295.
- Sebastian Edwards & Roberto Rigobon, 2005. "Capital Controls, Exchange Rate Volatility and External Vulnerability," NBER Working Papers 11434, National Bureau of Economic Research, Inc.
- Palley, Thomas I., 2008. "Keynesian models of deflation and depression revisited," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 167-177, October.
- Colin I. BRADFORD, Jr., 2005. "Prioritizing Economic Growth: Enhancing Macroeconomic Policy Choice," G-24 Discussion Papers 37, United Nations Conference on Trade and Development.
When requesting a correction, please mention this item's handle: RePEc:uma:periwp:wp193. 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: (Judy Fogg)
If references are entirely missing, you can add them using this form.