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Capital Controls and the Timing of Exchange Regime Collapse

This paper investigates the nature of balance of payments crises in regimes with capital controls. It extends earlier work on capital controls by assuming that households manage their consumption and asset portfolios to maximize intertemporal utility. Our main result is that capital controls are effective in delaying, but not preventing, a breakdown of a fixed exchange rate regime in the presence of money-financed fiscal deficits.
Year of publication:
1987-05
Authors: Park, Daekuen ; Sachs, Jeffrey
Institutions: National Bureau of Economic Research (NBER)
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application/pdf
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Type of publication: Book / Working Paper
Notes:
ITI IFM published as Daekeun Park & Jeffrey D. Sachs, 1996. "The Timing Of Exchange Regime Collapse Under Capital Controls," International Economic Journal, Korean International Economic Association, vol. 10(4), pages 123-141, December. Number 2250
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Persistent link: https://www.econbiz.de/10005714008
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