Welfare Benefits of Capital Controls:The Case of Spain

Shigeto Kitano and Yoichi Matsubayashi ()

No DP2014-21, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: We estimate a small open economy RBC model augmented with a simple form of financial frictions using Spanish data and Bayesian methods. The estimated model matches well with key Spanish business cycle statistics. Using the estimated model, we find that significant welfare benefits may accrue from capital controls.

Keywords: Capital controls; Welfare; DSGE; Small open economy models; Bayesian estimation (search for similar items in EconPapers)
JEL-codes: F41 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2014-05
New Economics Papers: this item is included in nep-dge and nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:kob:dpaper:dp2014-21

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