TY - JOUR AU - Dellas, Harris AU - Stockman, Alan C TI - Self-fulfillment Expectations, Speculation Attacks, and Capitol Controls JF - National Bureau of Economic Research Working Paper Series VL - No. 2625 PY - 1988 Y2 - June 1988 DO - 10.3386/w2625 UR - http://www.nber.org/papers/w2625 L1 - http://www.nber.org/papers/w2625.pdf N1 - Author contact info: Harris Dellas Department of Economics University of Bern VWI, Schanzeneckstrasse 1 CH 3012 Bern Switzerland E-Mail: harris.dellas@vwi.unibe.ch Alan C. Stockman Department of Economics University of Rochester Rochester, NY 14627-0156 Tel: 585/275-7214 Fax: 585/256-2309 E-Mail: N/A user is deceased AB - This paper examines the endogenous implementation of capital controls in the context of a fixed exchange rate regime. It is shown that if there exists a non-zero probability that the policymaker's response to a speculative attack on official foreign reserves will be the introduction of controls, such an attack may occur even when current and expected monetary policy is consistent with a permanently viable, control-free fixed exchange rate regime. Consequently, capital controls may be the outcome of self- fulfilling expectations rather than the result of imprudent economic policies. ER -