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  -