The effectiveness of macroprudential policies and capital controls against volatile capital inflows
Jon Frost,
Hiro Ito and
René van Stralen
Working Papers from DNB
Abstract:
This paper compares the effectiveness of macroprudential policies (MaPs) and capital controls (CCs) in influencing the volume and composition of capital inflows, and the probability of banking and currency crises. We distinguish between foreign exchange (FX)-based MaPs, which may be similar to some types of CCs, and non-FX-based MaPs. Using a panel of 83 countries over the period 2000-17, and a propensity score matching model to control for selection bias, we find that capital inflow volumes are lower where FX-based MaPs have been activated. The imposition of CCs does not have a significant effect on the volume or composition of capital inflows. Further, we find that the activation of MaPs is associated with a lower probability of banking crises and surges in capital inflows in the following three years.
Keywords: capital account openness; capital flows; capital controls; macroprudential policy; banking crises; currency crises (search for similar items in EconPapers)
JEL-codes: F38 G01 G28 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-mac, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)
Downloads: (external link)
https://www.dnb.nl/media/4dlerljd/working-paper-no-686_tcm47.pdf
Related works:
Working Paper: The effectiveness of macroprudential policies and capital controls against volatile capital inflows (2020) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:dnb:dnbwpp:686
Access Statistics for this paper
More papers in Working Papers from DNB Contact information at EDIRC.
Bibliographic data for series maintained by DNB ().