Effectiveness of Capital Controls in Selected Emerging Markets in the 2000s

45 Pages Posted: 12 Dec 2011

See all articles by Annamaria Kokenyne

Annamaria Kokenyne

International Monetary Fund (IMF)

Chikako Baba

International Monetary Fund (IMF)

Date Written: December 2011

Abstract

This paper estimates the effectiveness of capital controls in response to inflow surges in Brazil, Colombia, Korea, and Thailand in the 2000s. Controls are generally associated with a decrease in inflows and a lengthening of maturities, but the relationship is not statistically significant in all cases, and the effects are temporary. Controls are more successful in providing room for monetary policy than dampening currency appreciation pressures. We argue that the macroeconomic impact of capital controls depends on the extensiveness of the policy, the level of capital market development, the support provided by other policies, and the persistence of capital flows.

Keywords: Capital controls, Capital inflows, Emerging markets, Private capital flows

Suggested Citation

Kokenyne, Annamaria and Baba, Chikako, Effectiveness of Capital Controls in Selected Emerging Markets in the 2000s (December 2011). IMF Working Papers, Vol. , pp. 1-44, 2011. Available at SSRN: https://ssrn.com/abstract=1971432

Annamaria Kokenyne (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Chikako Baba

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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