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Excessive Volatility in Capital Flows: A Pigouvian Taxation Approach / Olivier Jeanne, Anton Korinek.
- Format:
- Book
- Author/Creator:
- Jeanne, Olivier.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w15927.
- NBER working paper series no. w15927
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2010.
- Summary:
- This paper analyzes prudential controls on capital flows to emerging markets from the perspective of a Pigouvian tax that addresses externalities associated with the deleveraging cycle. It presents a model in which restricting capital inflows during boom times reduces the potential outflows during busts. This mitigates the feedback effects of deleveraging episodes, when tightening financial constraints on borrowers and collapsing prices for collateral assets have mutually reinforcing effects. In our model, capital controls reduce macroeconomic volatility and increase standard measures of consumer welfare.
- Notes:
- Print version record
- April 2010.
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