Capital Controls and the International Transmission of U.S. Money Shocks

59 Pages Posted: 22 Nov 2003

See all articles by Jacques Miniane

Jacques Miniane

Johns Hopkins University - Department of Economics

John H. Rogers

Board of Governors of the Federal Reserve System - Trade and Financial Studies Section

Date Written: July 10, 2003

Abstract

In this paper we assess whether capital controls effectively insulate countries from U.S. monetary shocks, looking simultaneously at a large range of country experiences in a unified estimation framework. We estimate the effect of identified U.S. monetary shocks on the exchange rate and foreign country interest rates, and test whether countries with less open capital accounts exhibit systematically smaller responses. We find essentially no evidence in favor of this notion. Other country factors such as the exchange rate regime or degree of dollarization explain more of the cross-country differences in responses. The significant differences in responses we do find are more pronounced at short horizons.

Keywords: Capital account, international debt, short-term capital

JEL Classification: F32, F34

Suggested Citation

Miniane, Jacques and Rogers, John H., Capital Controls and the International Transmission of U.S. Money Shocks (July 10, 2003). FRB International Finance Discussion Paper No. 778. Available at SSRN: https://ssrn.com/abstract=457342 or http://dx.doi.org/10.2139/ssrn.457342

Jacques Miniane

Johns Hopkins University - Department of Economics ( email )

3400 Charles Street
Baltimore, MD 21218-2685
United States

John H. Rogers (Contact Author)

Board of Governors of the Federal Reserve System - Trade and Financial Studies Section ( email )

20th St. and Constitution Ave.
Washington, DC 20551
United States
202-452-2873 (Phone)
202-736-5638 (Fax)

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