THE DOMESTIC IMPACTS AND SPILLOVERS OF CAPITAL CONTROLSChokri Zehri Economic Annals, 2020, vol. 65, issue 227, 31 - 66 Abstract: The effectiveness of capital controls has still not been established, and if they are indefinite they create distortions. This study uses quarterly data on capital controls in 25 Asian and Latin American countries from 2000 to 2019. We present further evidence on the internal and mul-tilateral impacts of capital controls using a Panel VAR model with variance decom-position and impulse-response function analysis. The results show that domestical-ly, capital controls, became more effective after the global financial crisis, with more monetary policy autonomy and exchange rate policy stability. Contrarily, these con-trols do not affect international reserve ac-cumulation, and a combination of policies, capital controls, and reserves is required to assist governments’ decisions. Interna-tionally, capital controls cause negative spillovers that require policy coordination between the countries setting controls and those consequently receiving massive in-flows. Keywords: capital controls; monetary policy; exchange rate policy; reserves; spill-overs (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:beo:journl:v:65:y:2020:i:227:p:31-66 Ordering information: This journal article can be ordered from Access Statistics for this article Economic Annals is currently edited by Will Bartlett More articles in Economic Annals from Faculty of Economics and Business, University of Belgrade Contact information at EDIRC. |
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