Countries choose diverse policy mixes of macroprudential and capital flow management measures, yet the drivers behind these policy choices remain largely unexplored. We identify potential conditions for the adoption and determinants of the use of macroprudential and capital flow management...

This paper investigates the role of capital controls in managing volatile capital flows by examining how developing countries (DCs) absorb this volatility. Using data from 44 DCs over the 2000-2019 period, we distinguish the extent to which countries offset inflow surges with outflows. We find...

The complex nature of international capital flows remains a central topic in academic debate. Despite extensive research, the relationship between capital inflows and financial system vulnerabilities remains complex and influenced by both global, regional and domestic factors that necessitate...

This paper aims to analyze changes in the long-term and short-term oil price elasticities of the real ruble exchange rate, as well as the speed of convergence of the exchange rate to a long-term equilibrium. The analysis is conducted using an error correction model with time-varying parameters....

We study capital controls on outflows (CCOs) in situations of macroeconomic and financial distress. We present novel empirical evidence indicating that CCO implementation is associated with crises and declines in GDP growth. We then develop a theoretical framework that is consistent with such...

The finding of Feldstein and Horioka (1980) that domestic saving and domestic investment are highly correlated across countries despite the rapid globalization and liberalization of financial markets in recent decades has been regarded as a Puzzle or Paradox. However, in this paper, we show that...

The AREAER provides a comprehensive description of restrictions on international trade and payments, capital controls, and measures implemented in the financial sector, including prudential measures that may affect capital flows for all IMF members. It also provides information on the...

A central prediction of open economy models with a pecuniary externality due to a collateral constraint is that the unregulated economy overborrows relative to what occurs under optimal policy. A maintained assumption in this literature is that households borrow directly from foreign lenders....

Leveraging the phased implementation of China's capital control reforms, where select firms gradually become investable to the international market, our difference-in-differences regression analyses reveal that these pilot firms significantly curtail the extent of related party transactions and...

Large swings in cross-border capital flows can have consequences for domestic stability and open a channel for the transmission of shocks and spillovers across economies, including the euro area. Against this backdrop, the present paper reviews new evidence for the effectiveness of capital flow...

We study how capital controls and domestic macroprudential policy tame credit supply booms, respectively targeting foreign and domestic bank debt. For identification, we exploit the simultaneous introduction of capital controls on foreign exchange (FX) debt inflows and an increase of reserve...

We show that capital controls (CC), by slowing-down firm debt-growth in the boom, improve firm performance during crises. Exploiting a tax on foreign-currency (FX) debt inflows in Colombia before the Global Financial Crisis (GFC) and multiple firm-level and loan-level administrative datasets, we...

With rising financial integration, the magnitude and swings in capital flows have increased in the past two decades, intensifying the policy debate on how best to deal with these flows. This paper assesses the use and effectiveness of capital controls in limiting inflow surges. Using a novel...

This study aims to identify the need for ambiguity as a result of mixed and contradictory suggestions of the trade agreement and capital liberalisation on a country’s welfare. Using more comprehensive datasets on inflow and outflow capital control, we find significant and mixed capital control...

In this study, we construct a set of monthly de jure indexes that measure the on-going changes in capital controls in 190 countries from 1999 to 2019. The information about policy changes on capital accounts is extracted from the International Monetary Fund’s Annual Report on Exchange...

This paper shows that the adoption of fiscal rules (FRs) decreases the use of capital controls and increases international financial integration. This result is robust to alternative measures of fiscal rules, capital controls, and international financial integration; it is also robust to...

The present international financial architecture (IFA) has been weakening since the early 2010s. Several factors have hindered the reorganization of the current IFA, accelerated the bipolarization of international financial relations, and reshaped the balance of power between sovereign debtors...

This study analyzes the effectiveness of capital controls on international debt flows using data of 81 economies, including both advanced and emerging economies, over the period from 1995 to 2019. The analysis using the total sample shows that, although they are in the expected directions, the...

This paper examines possible heterogeneity in the direct and spillover effects of capital control on gross capital flows. First, I introduce signaling effect of capital control in a portfolio choice model with a multi-country set up to demonstrate the possibly heterogeneity in the direct effect...