NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Kevin Cowan

Central Bank of Chile
Agustinas 1180
Santiago
Chile
Tel: (562) 6702192

E-Mail: no email available

NBER Working Papers and Publications

May 2007International Borrowing, Capital Controls, and the Exchange Rate: Lessons from Chile
with José De Gregorio
in Capital Controls and Capital Flows in Emerging Economies: Policies, Practices and Consequences, Sebastian Edwards, editor
May 2005International Borrowing, Capital Controls and the Exchange Rate: Lessons from Chile
with Jose De Gregorio: w11382
This paper analyzes the Chilean experience with capital flows. We discuss the role played by capital controls, financial regulations and the exchange rate regime. The focus is on the period after 1990, the period when Chile returned to international capital markets. We also discuss the early 80s, where a currency collapse triggered a financial crisis in Chile, despite stricter capital controls on inflows than the 90s and tighter currency matching requirements on the banking sector. We conclude that financial regulation and the exchange rate regime are at the center of capital inflows experiences and financial vulnerabilities. Rigid exchange rates induce vulnerabilities, which may lead to sharp capital account reversals. We also discuss three important characteristics of the Chilean experie...

Published: International Borrowing, Capital Controls, and the Exchange Rate: Lessons from Chile, Kevin Cowan, José De Gregorio. in Capital Controls and Capital Flows in Emerging Economies: Policies, Practices and Consequences, Edwards. 2007

May 2004Fear of Sudden Stops: Lessons from Australia and Chile
with Ricardo Caballero, Jonathan Kearns: w10519
Latin American economies are exposed to substantial external vulnerability. Domestic imbalances and terms of trade shocks are often exacerbated by sudden stops of capital inflow. In this paper we explore ways of overcoming external vulnerability, drawing lessons from a detailed comparison of the response of Chile and Australia to recent external shocks and from Australia's historical experience. We argue that in order to understand sudden stops and the mechanisms to smooth them, it is useful to identify and then distinguish between two inter-related dimensions of investors' confidence: country-trust and currency-trust. Lack of country-trust is a more fundamental and serious problem behind sudden stops. But lack of currency-trust may both be a source of country-trust problems and weaken a c...

Published: Ricardo Caballero & Kevin Cowan & Jonathan Kearns, 2005. "Fear of Sudden Stops: Lessons From Australia and Chile," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 8(4), pages 313-354. citation courtesy of

 
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