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Monetarism and Liberalization
- Publisher
- American Economic Association
- Copyright
- Copyright © 1999 by the American Economic Association
- Subject
- Symposium
- ISSN
- 0895-3309
- DOI
- 10.1257/jep.13.4.65
- Publisher site
- See Article on Publisher Site
Abstract
Abstract A number of authors have recently argued that, in order to avoid financial instability, emerging countries should rely on capital controls. Two type of controls have been considered: controls on capital outflows, and controls on capital inflows. In this paper I review the historical evidence on the effectiveness of these two type of controls. I argue that controls on outflows have been ineffective. They are circumvented and breed corruption. I also analyze Chile's recent experience with controls on inflows, and I argue that their effectiveness has been exaggerated.
Journal
Journal of Economic Perspectives – American Economic Association
Published: Nov 1, 1999