How Effective are Capital Controls?

Sebastian Edwards

No 7413, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In the aftermath of the East Asian crisis a number of authors have argued that capital mobility is highly destabilizing, and that emerging countries would benefit from restricting capital flows. In this paper I investigate, from a historical perspective, the effectiveness of capital controls. I deal with Tobin taxes, controls on outflows and controls on inflows. I argue that controls on outflows have seldom worked as expected. They introduce major distortions and breed corruption. Market-based controls on inflows - similar to those implemented by Chile - have the potential for lengthening the maturity of foreign debt. They are not very effective, however, in achieving other objectives, including a higher degree of monetary policy independence.

JEL-codes: F32 F33 (search for similar items in EconPapers)
Date: 1999-11
New Economics Papers: this item is included in nep-ifn
Note: IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (290)

Published as Journal of Economic Perspectives, Vol. 13, no. 4 (Fall 1999): 65-84.

Downloads: (external link)
http://www.nber.org/papers/w7413.pdf (application/pdf)

Related works:
Journal Article: How Effective Are Capital Controls? (1999)
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:7413

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w7413

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 (wpc@nber.org).