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Capital Account Policies, Imf Programs And Growth In Developing Regions

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  • Zorobabel Bicaba
  • Zuzana Brixiov??
  • Mthuli Ncube

Abstract

This paper examines capital account policy choices in an innovative model with adaptive learning under uncertainty. In the model, countries??? past experiences and IMF programs influence policymakers??? beliefs about impact of capital account liberalization on growth, taking into account constraints imposed by the ???Mundell???s trilemma???. The model, calibrated to data for Africa, Latin America and developing Asia, is consistent with capital account policies during 1980 ??? 2010, including the delayed capital account liberalization in Africa. One of the implications of the model is that even countries with liberalized capital accounts could revert to the use of capital controls in the presence of particularly large output shocks.

Suggested Citation

  • Zorobabel Bicaba & Zuzana Brixiov?? & Mthuli Ncube, 2014. "Capital Account Policies, Imf Programs And Growth In Developing Regions," William Davidson Institute Working Papers Series wp1085, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2014-1085
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    More about this item

    Keywords

    Adaptive learning; dynamics of capital account policies; growth; IMF programs;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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