Capital Controls and International Trade Finance / Alberto Giovannini, Jan Won Park.

Format:

Book

Author/Creator:

Giovannini, Alberto.

Contributor:

National Bureau of Economic Research.

Won Park, Jan.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3112.

NBER working paper series no. w3112

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1989.

Summary:

This paper studies the effects of prohibiting individuals from holding foreign assets, and of allowing firms to trade in foreign assets only up to what is needed to finance export and import activities. Although firms can perform arbitrage between domestic and foreign financial markets, the distortions in asset markets are not fully arbitraged away but instead they are transmitted to domestic goods market. The paper discusses the effects of shocks in foreign financial markets and in domestic fiscal policy. We show that the dynamics and steady states are crucially affected by capital controls.

Notes:

Print version record

September 1989.