Can Short-Term Capital Controls Promote Capital Inflows

In an economy à la Diamond and Dybvig (1983), we present an example in which foreign lenders find it profitable to invest in an emerging market if, and only if, the emerging market government imposes taxes on short-term capital inflows. This implies that capital controls that are effective in reducing the vulnerability of emerging markets to financial crises may increase the volume of capital inflows.

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Year of publication:	1998-11
Authors:	Cordella, Tito
Institutions:	C.E.P.R. Discussion Papers
Subject:	bank runs \| Capital Controls \| Capital Inflows \| Herd Behaviour

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 2011
Classification:	F32 - Current Account Adjustment; Short-Term Capital Movements ; G14 - Information and Market Efficiency; Event Studies ; G24 - Investment Banking; Venture Capital; Brokerage
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005791708