Capital Controls and Recovery from the Financial Crisis of the 1930s / Kris James Mitchener, Kirsten Wandschneider.

Format:

Book

Author/Creator:

Mitchener, Kris James.

Contributor:

National Bureau of Economic Research.

Wandschneider, Kirsten.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20220.

NBER working paper series no. w20220

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

We examine the first widespread use of capital controls in response to a global or regional financial crisis. In particular, we analyze whether capital controls mitigated capital flight in the 1930s and assess their causal effects on macroeconomic recovery from the Great Depression. We find evidence that they stemmed gold outflows in the year following their imposition; however, time-shifted, difference-in- differences (DD) estimates of industrial production, prices, and exports suggest that exchange controls did not accelerate macroeconomic recovery relative to countries that went off gold and floated. Countries imposing capital controls also appear to perform similar to the gold bloc countries once the latter group of countries finally abandoned gold. Time series analysis suggests that countries imposing capital controls refrained from fully utilizing their newly acquired monetary policy autonomy.

Notes:

Print version record

June 2014.