TY  - JOUR
AU  - Giovannini,Alberto
AU  - Park,Jan Won
TI  - Capital Controls and International Trade Finance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3112
PY  - 1989
Y2  - September 1989
UR  - http://www.nber.org/papers/w3112
L1  - http://www.nber.org/papers/w3112.pdf
N1  - Author contact info:
Alberto Giovannini
Unifortune Asset Management
Via Donizetti 53
20122 Milano, Italy
E-Mail: alberto.giovannini@alum.mit.edu
AB  - 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. 
ER  -