NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Marcio Garcia

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers onlyInformation about this author at RePEc

Working Papers

June 2006Ineffective Controls on Capital Inflows Under Sophisticated Financial Markets: Brazil in the Nineties
with Bernardo S. de M. Carvalho: w12283
We analyze the Brazilian experience in the 1990s to assess the effectiveness of controls on capital inflows in restricting financial inflows and changing their composition towards long term flows. Econometric exercises (VARs) showed that controls on capital inflows were effective in deterring financial inflows for only a brief period, from two to six months. The hypothesis to explain the ineffectiveness of the controls is that financial institutions performed several operations aimed at avoiding capital controls. To check this hypothesis, we conducted interviews with market players. We collected several examples of the financial strategies engineered to avoid the capital controls and invest in the Brazilian fixed income market. The main conclusion is that controls on capital inflows, while...

Published: Ineffective Controls on Capital Inflows under Sophisticated Financial Markets: Brazil in the Nineties, Bernardo S. de M. Carvalho, Márcio G. P. Garcia. in Financial Markets Volatility and Performance in Emerging Markets, Edwards and Garcia. 2008

March 2004A Risk Management Approach to Emerging Market's Sovereign Debt Sustainability with an Application to Brazilian Data
with Roberto Rigobon: w10336
In this paper we study the question of debt sustainability from a risk management perspective. The debt accumulation equation for any country involves variables that are stochastic and closely intertwined. When these aspects are taken into consideration the notion of debt sustainability is expanded to studying the stochastic properties of the debt dynamics. We illustrate the methodology by studying the Brazilian case. We find that even though the debt could be sustainable in the absence of risk, there are paths in which it is clearly unsustainable. Furthermore, we show that properties of the debt dynamics are closely related to the spreads on sovereign dollar denominated debt.

Published: Giavazzi, Francesco, Ilan Goldfajn, and Santiago Herrera (eds.) Inflation Targeting, Debt, and the Brazilian Experience: 1999 to 2003. Cambridge ,MA: MIT Press, 2005.

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers onlyInformation about this author at RePEc

 
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