Capital flow restrictions have long been debated as a tool to manage external financial vulnerabilities, as volatile international capital flows and high external debt can contribute to financial crises. However, empirical evidence on whether capital flow management measures (CFMs) can shift the...

This paper introduces the FinOpen index, a novel measure of capital flow management for 193 countries from 1996 to 2022. Using information from the IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER), the index is constructed by estimating the level of openness...

Countries implement and liberalize capital controls opportunistically. To show this point, this paper introduces two novel indices—the Financial Account Restrictiveness Index (FARI) and the AREAER Change Index (ACI)—to measure and track capital flow restrictions across 190 countries...

Does Financial Action Task Force (FATF) grey-listing disrupt cross-border financial flows? The answer is not obvious. Grey-listing imposes no formal transaction restrictions, yet it can trigger compliance responses by financial institutions facing heightened regulatory risk and the prospect of...

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...

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 examines how international investment agreements constrain the use and effectiveness of capital controls in emerging and developing economies. Leveraging a novel database on the specific content of investment treaties, I identify those that include "macro-stability exceptions", which...

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 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...

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...

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....

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...

In this paper we assess the effectiveness of macroprudential policies and capital controls in supporting financial stability. We construct a large and granular dataset on prudential and capital flow management measures covering 53 countries during 1996-2016. Conditional on a credit boom, we...

This paper provides an analysis of the use and effects of capital controls in 27 AEs and EMDEs which experienced at least one financial crisis between 1995 and 2017. Countries often turn to using capital controls in crisis: some ease inflow controls while others tighten controls on outflows. A...

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...

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...

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...

Emerging markets and developing economies (EMDEs) exhibit significantly greater volatility in asset returns than advanced economies. The commonalities in these returns (and flows) across countries are particularly strong for EMDEs. If these occur independently of the exchange rate regime and if...

We review the literature on the effectiveness of capital controls and macroprudential measures. First, we explain the purposes and examples of capital controls and macroprudential policies. We then analyze various theoretical models and empirical findings from prior studies that investigate the...