Permanent and Selective Capital Account Management Regimes as an Alternative to Self-Insurance Strategies in Emerging-market Economies

Jörg Bibow

Economics Working Paper Archive from Levy Economics Institute

Abstract: Currency market intervention-cum-reserve accumulation has emerged as the favored "self-insurance" strategy in recipient countries of excessive private capital inflows. This paper argues that capital account management represents a less costly alternative line of defense deserving renewed consideration, especially in the absence of fundamental reform of the global monetary and financial order. Mainstream arguments in favor of financial globalization are found unconvincing; any indirect benefits allegedly obtainable through hot money inflows are equally obtainable without actually tolerating such inflows. The paper investigates the experiences of Brazil, Russia, India, and China (the BRICs) in the global crisis and subsequent recovery, focusing on their respective policies regarding capital flows.

Keywords: Capital Flows; Self-Insurance; Capital Controls; Financial Regulation (search for similar items in EconPapers)
JEL-codes: F02 F32 F33 F39 G28 O23 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-ias, nep-ifn and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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