European Central Bank
NBER Working Papers and Publications
|January 2015||Capital Flow Management Measures: What Are They Good For?|
with Kristin Forbes, Marcel Fratzscher: w20860
Are capital controls and macroprudential measures related to international exposures successful in achieving their objectives? Assessing their effectiveness is complicated by selection bias; countries which change their capital-flow management measures (CFMs) often share specific characteristics and are responding to changes in variables that the CFMs are intended to influence. This paper addresses these challenges by using a propensity-score matching methodology. We also create a new database with detailed information on weekly changes in controls on capital inflows, capital outflows, and macroprudential measures related to international transactions from 2009 to 2011 for 60 countries. Results show that these macroprudential measures can significantly reduce some measures of financial fra...
Published: Forbes, Kristin & Fratzscher, Marcel & Straub, Roland, 2015. "Capital-flow management measures: What are they good for?," Journal of International Economics, Elsevier, vol. 96(S1), pages S76-S97. citation courtesy of
|June 2014||Capital-flow Management Measures: What Are They Good For?|
with Kristin Forbes, Marcel Fratzscher
in NBER International Seminar on Macroeconomics 2014, Richard Clarida, Jeffrey Frankel, Francesco Giavazzi, and Hélène Rey, organizers
|May 2012||Bubble Thy Neighbor: Portfolio Effects and Externalities from Capital Controls|
with Kristin Forbes, Marcel Fratzscher, Thomas Kostka: w18052
We use changes in Brazil's tax on capital inflows from 2006 to 2011 to test for direct portfolio effects and externalities from capital controls on investor portfolios. The analysis is structured based on information from investor interviews. We find that an increase in Brazil's tax on foreign investment in bonds causes investors to significantly decrease their portfolio allocations to Brazil in both bonds and equities. Investors simultaneously increase allocations to other countries that have substantial exposure to China and decrease allocations to countries viewed as more likely to use capital controls. Much of the effect of capital controls on portfolio flows appears to occur through signalling --i.e. changes in investor expectations about future policies-- rather than the direct cost ...
Published: Forbes, Kristin & Fratzscher, Marcel & Kostka, Thomas & Straub, Roland, 2016. "Bubble thy neighbour: Portfolio effects and externalities from capital controls," Journal of International Economics, Elsevier, vol. 99(C), pages 85-104. citation courtesy of
|June 2007||International Transmission and Monetary Policy Cooperation|
with Günter Coenen, Giovanni Lombardo, Frank Smets
in International Dimensions of Monetary Policy , Jordi Galí and Mark J. Gertler, editors