EconPapers    
Economics at your fingertips  
 

Domestic and Multilateral Effects of Capital Controls in Emerging Markets

Gurnain Pasricha (), Matteo Falagiarda, Martin Bijsterbosch and Joshua Aizenman ()

Staff Working Papers from Bank of Canada

Abstract: Using a novel data set on capital control actions in 17 emerging-market economies (EMEs) over the period 2001–11, we provide new evidence on domestic and multilateral (or spillover) effects of capital controls. Our results, based on panel vector autoregressions, suggest that capital control actions had limited impact on the variables of the monetary policy trilemma, as a result of offsetting resident flows and ample investment opportunities in EMEs. These findings highlight the importance of the macroeconomic context and of the increasing role of resident flows in understanding the effectiveness of capital inflow management. Tightening of capital inflow restrictions in Brazil, Russia, India, China and South Africa (the BRICS) generated significant spillovers via bank lending and exchange rates, particularly in the post-2008 environment of abundant global liquidity. Spillovers seem to be strongest among the BRICS and in Latin America. These results are robust to various specifications of our models.

Keywords: Econometric and statistical methods; Financial system regulation and policies; International financial markets; International topics; Monetary policy framework (search for similar items in EconPapers)
JEL-codes: F32 G15 F41 F42 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2015
New Economics Papers: this item is included in nep-cis, nep-ifn and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13) Track citations by RSS feed

Downloads: (external link)
https://www.bankofcanada.ca/wp-content/uploads/2015/10/wp2015-37.pdf

Related works:
Journal Article: Domestic and multilateral effects of capital controls in emerging markets (2018) Downloads
Working Paper: Domestic and multilateral effects of capital controls in emerging markets (2015) Downloads
Working Paper: Domestic and Multilateral Effects of Capital Controls in Emerging Markets (2015) Downloads
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:bca:bocawp:15-37

Access Statistics for this paper

More papers in Staff Working Papers from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-10-23
Handle: RePEc:bca:bocawp:15-37