A Survey of Literature on Controls over International Capital Transactions

Michael Dooley

IMF Staff Papers, 1996, vol. 43, issue 4, 639-687

Abstract: This paper reviews recent theoretical and empirical work on controls over international capital movements. Theoretical contributions reviewed focus on "second-best" arguments for capital market restrictions, as well as arguments based on multiple equilibria. The empirical literature suggests that controls have been "effective" in the narrow sense of influencing yield differentials. But there is little evidence that controls have helped governments meet policy objectives, with the exception of reducing the governments' debt-service costs, and no evidence that controls have enhanced economic welfare in a manner suggested by theory.

JEL-codes: F34 G15 G28 (search for similar items in EconPapers)
Date: 1996
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Citations: View citations in EconPapers (118)

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