Controls on Capital Inflows and External Shocks

The author attempts to analyze whether price-based controls on capital inflows are successful in insulating economies against external shocks. He presents results from vector auto regressive (VAR) models that indicate that Chile and Colombia, countries that adopted controls on capital inflows, seem to have been relatively well insulated against external disturbances. Subsequently, he uses the auto regressive distributed lag (ARDL) approach to co-integration to isolate the effects of the capital controls on the pass-through of external disturbances to domestic interest rates in those economies. The author concludes that there is evidence that the capital controls allowed for greater policy autonomy.

Bibliographic Details

Main Author:	David, Antonio C.
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	World Bank, Washington, DC 2007-03
Subjects:	ARBITRAGE, BALANCE SHEETS, BONDS, CAPITAL ACCOUNT, CAPITAL ACCOUNT POLICIES, CAPITAL ACCOUNT RESTRICTIONS, CAPITAL CONTROLS, CAPITAL FLOWS, CAPITAL GAINS, CAPITAL INFLOW, CAPITAL INFLOWS, CAPITAL OUTFLOWS, CENTRAL BANK, CENTRAL BANKS, COMPOSITION OF CAPITAL INFLOWS, CONSUMER PRICE INDEX, COUNTRY RISK, CREDIT EXPANSION, CRISIS EPISODES, CURRENCY CRISES, CURRENCY MISMATCH, CURRENCY REGIME, CURRENCY RISK, CURRENT ACCOUNT, CURRENT ACCOUNT DEFICITS, CYCLICAL COMPONENT, DEPOSIT INTEREST, DEPOSIT INTEREST RATES, DEPOSIT RATE, DEPOSIT REQUIREMENT, DEVELOPING COUNTRIES, DEVELOPMENT ECONOMICS, DOMESTIC ECONOMY, DOMESTIC INFLATION, DOMESTIC INTEREST RATE, DOMESTIC INTEREST RATES, DOMESTIC RESIDENTS, ECONOMETRICS, ECONOMIC ACTIVITY, ECONOMIC REVIEW, ECONOMIC SITUATION, ECONOMIC VOLATILITY, EMERGING ECONOMIES, EMERGING MARKETS, ENDOGENOUS VARIABLES, EXCHANGE RATE REGIME, EXCHANGE RATES, EXCHANGE-RATE, EXOGENOUS VARIABLES, EXPORTS, EXTERNAL DEBT, EXTERNAL DISTURBANCES, EXTERNAL SHOCKS, EXTERNALITY, FEDERAL RESERVE BANK, FEDERAL RESERVE BOARD, FEDERAL RESERVE SYSTEM, FINANCIAL CONTAGION, FINANCIAL CRISES, FINANCIAL CYCLES, FINANCIAL FRAGILITY, FINANCIAL INTEGRATION, FINANCIAL INTERMEDIARIES, FINANCIAL MARKET, FINANCIAL MARKETS, FOREIGN CURRENCY, FOREIGN EXCHANGE, FOREIGN EXCHANGE MARKET, FOREIGN INTEREST RATE, FOREIGN INTEREST RATES, FOREIGN INVESTORS, FOREIGN RATES, FOREIGN RESERVES, FOREIGN SHOCKS, GLOBAL TRANSMISSION OF INTEREST RATES, GLOBALIZATION OF SECURITIES MARKETS, HIGH INFLATION, HOT MONEY, INFLATION RATE, INTERNATIONAL CAPITAL, INTERNATIONAL FINANCE, INTERNATIONAL FINANCIAL MARKETS, INTERNATIONAL FINANCIAL STATISTICS, INTERNATIONAL INVESTORS, INTERNATIONAL MARKETS, INTERNATIONAL RESERVES, LATIN AMERICAN, LIQUIDITY, MACROECONOMIC POLICIES, MACROECONOMIC VARIABLES, MACROECONOMICS, MONETARY POLICY, MORAL HAZARD, MULTIPLE EQUILIBRIA, NOMINAL EXCHANGE RATE, OPEN ECONOMIES, OPEN ECONOMY, OPPORTUNITY COST, OVERVALUATION, POLICY RESEARCH, PORTFOLIOS, REAL EXCHANGE, REAL EXCHANGE RATE, REAL EXCHANGE RATE APPRECIATION, REAL EXCHANGE RATE OVERVALUATION, REAL INTEREST, REAL INTEREST RATE, REAL TERMS, RESERVE, RESERVE REQUIREMENT, RESERVE REQUIREMENTS, RISK AVERSION, RISK PREMIA, RISK PREMIUM, SHORT-TERM CAPITAL, SHORT-TERM CAPITAL INFLOWS, SHORT-TERM DEBT, SIDE EFFECTS, T-BILLS, TRANSMISSION MECHANISM,
Online Access:	http://documents.worldbank.org/curated/en/2007/03/7471947/controls-capital-inflows-external-shocks http://hdl.handle.net/10986/7235
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