TY  - JOUR
AU  - Edwards,Sebastian
AU  - Ostry,Jonathan D.
TI  - Terms of Trade Disturbances, Real Exchange Rates and Welfare:  The Role of Capital Controls and Labor Market Distortions
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2907
PY  - 1992
Y2  - May 1992
UR  - http://www.nber.org/papers/w2907
L1  - http://www.nber.org/papers/w2907.pdf
N1  - Author contact info:
Sebastian Edwards
UCLA Anderson Graduate School of Business
110 Westwood Plaza, Suite C508
Box 951481
Los Angeles, CA 90095-1481
Tel: 310/206-6797
Fax: 310/206-5825
E-Mail: sebastian.edwards@anderson.ucla.edu

Jonathan D. Ostry
Research Department
International Monetary Fund
HQ1-10-700
700 19th Street, N.W.
Washington DC, 20431
E-Mail: jostry@imf.org
AB  - Many arguments that have been advanced in favor of maintaining capital control within the EEC have not paid sufficient attention to the welfare consequences of this type of market intervention. Our paper provides a simple, optimizing framework in which the welfare consequences of capital controls can be assessed. Two main issues are considered. First, how do capital controls affect the adjustment of macroeconomic variables to real disturbances? Second, what is the nature of second best arguments for maintaining capital controls given that certain distortions will remain after the European single market is in place in 1992?
ER  -