Capital Controls in Brazil - Stemming a Tide with a Signal?
Yothin Jinjarak,
Ilan Noy and
Huanhuan Zheng
No 19205, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
Controls on capital inflows have been experiencing a renaissance since 2008, with several prominent emerging markets implementing them. We focus on Brazil, which instituted five changes in its capital account regime in 2008-2011. Using the synthetic control method, we construct counterfactuals (i.e., Brazil with no policy change) for each of these changes. We find no evidence that any tightening of controls was effective in reducing the magnitudes of capital inflows, but we observe some modest and short-lived success in preventing further declines in inflows when the capital controls were relaxed. We hypothesize that price-based capital controls' only perceptible effect is to be found in the content of the signal they broadcast regarding the government's larger intentions and sensibilities. Brazil's left-of-center government's willingness to remove controls was perceived as a noteworthy indication that the government was not as hostile to the international financial markets as many expected it to be.
JEL-codes: E60 F32 G23 (search for similar items in EconPapers)
Date: 2013-07
New Economics Papers: this item is included in nep-ifn, nep-lam, nep-mac and nep-mon
Note: IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (56)
Published as Jinjarak, Yothin & Noy, Ilan & Zheng, Huanhuan, 2013. "Capital controls in Brazil â Stemming a tide with a signal?," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 2938-2952.
Downloads: (external link)
http://www.nber.org/papers/w19205.pdf (application/pdf)
Related works:
Journal Article: Capital controls in Brazil – Stemming a tide with a signal? (2013) 
Working Paper: Capital Controls in Brazil – Stemming a Tide with a Signal (2012) 
Working Paper: Capital Controls in Brazil: Stemming a Tide with a Signal? (2012) 
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:nbr:nberwo:19205
Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w19205
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().