Controls on Capital Inflows: Do they Work? / Jose De Gregorio, Sebastian Edwards, Rodrigo O. Valdes.

Format:

Book

Author/Creator:

De Gregorio, Jose.

Contributor:

National Bureau of Economic Research.

Edwards, Sebastian.

Valdes, Rodrigo O.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7645.

NBER working paper series no. w7645

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Controls on Capital Inflows

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2000.

Summary:

This paper analyzes the effectiveness of capital controls, in particular the Chilean experience with the use of the unremunerated reserve requirement. We examine the effects on interest rates, real exchange rate, and the volume and composition of capital inflows. The effects are elusive and it is difficult to pin down long-run effects. Although after the unremunerated reserve requirement was introduced there was an increase in the interest rate differential, the econometric evidence does not show it has a significant long-run effect on interest rate differentials. There are also no effects on the real exchange rate. However, the more persistent and significant effect is on the composition of capital inflows, tilting composition toward longer maturity.

Notes:

Print version record

April 2000.