TY  - JOUR
AU  - Edwards,Sebastian
TI  - How Effective are Capital Controls?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7413
PY  - 1999
Y2  - November 1999
UR  - http://www.nber.org/papers/w7413
L1  - http://www.nber.org/papers/w7413.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
AB  - In the aftermath of the East Asian crisis a number of authors have argued that capital mobility is highly destabilizing, and that emerging countries would benefit from restricting capital flows.  In this paper I investigate, from a historical perspective, the effectiveness of capital controls.  I deal with Tobin taxes, controls on outflows and controls on inflows.  I argue that controls on outflows have seldom worked as expected.  They introduce major distortions and breed corruption. Market-based controls on inflows - similar to those implemented by Chile - have the potential for lengthening the maturity of foreign debt.  They are not very effective, however, in achieving other objectives, including a higher degree of monetary policy independence.
ER  -