Revisiting the effects of exchange and capital restrictions on trade

Rodolfo Campos, Julia Estefania-Flores, Davide Furceri, Jonathan Ostry and Jacopo Timini

Journal of Policy Modeling, 2024, vol. 46, issue 4, 763-778

Abstract: This paper examines the effects of exchange and capital restrictions on trade and compares them with those associated with trade restrictions. Our main result is that capital account restrictions have large and statistically significant effects on trade flows. Such effects are smaller than those from trade restrictions, however. The effects of exchange and capital restrictions are larger for trade in goods, especially for agriculture and manufacturing, and smaller for trade in services.

Keywords: Trade restrictions; Capital restrictions; Structural gravity; Fragmentation (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:46:y:2024:i:4:p:763-778

DOI: 10.1016/j.jpolmod.2024.05.013

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