Economics Dictionary of ArgumentsHome
| |||
|
| |||
| Capital controls: Capital controls in economics are government policies that restrict or regulate the flow of capital across borders. These controls are used to manage financial stability, prevent excessive capital outflows, and protect the domestic economy from external shocks. They can include taxes, quotas, or outright restrictions on foreign investment. See also Currency crises._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
| Author | Concept | Summary/Quotes | Sources |
|---|---|---|---|
|
Stanley Fischer on Capital Controls - Dictionary of Arguments
Feldstein I 455 Capital Controls/Fischer: There are differences among types of capital control. In the first instance there is a need for prudential controls on the foreign exchange exposure of banks and possibly other institutions. We need more work to study the effectiveness of different types of prudential control and also to consider whether anything can or needs to be done to limit the exposures of nonfinancial corporations. The capital inflows problem of a country that is trying to stabilize, needing high domestic interest rates, is a familiar and difficult one. Not many countries have dealt with it successfully. Chile has. Maybe the controls have nothing whatever to do with Chile’s success, as some have argued, but that’s a hard case to make. Chile’s controls are market based, requiring a reserve deposit to be placed in the central bank. Such market-based measures are preferable to administrative controls with a large measure of discretion. >Exchange Rate Volatility/Rogoff. Feldstein I 456 IMF/Fischer: Let me also discuss the proposal to amend the Articles of Agreement of the IMF to make liberalization of capital flows a purpose of the IMF. At present we have as one of our purposes the promotion of current account convertibility, but not capital account convertibility-though we are allowed to require countries to impose capital controls in certain circumstances. The proposal to amend the articles in this direction has aroused a great deal of concern in many developing countries, though not, I believe, warranted concern. Capital account liberalization is something that in the long run is going to happen to almost every country, as current account liberalization has happened to almost every country. And in the long run, as financial structures strengthen, it will be a good thing. Quotas/capital account/Fischer: We know that quotas are by and large worse than tariffs, despite the reverse occasionally being true in very specific circumstances. We know something about liberalizing by cutting tariffs proportionally, and so forth. We don’t have similar answers on the capital account-and we should try to develop them. ((s) Written in 1999). Feldstein I 457 Equilibrium/Fischer: (…) I have great difficulty knowing how we know whether the market is doing right, whether there isn’t another equilibrium, and what exactly is driving these situations. But if that’s what you start believing, then you have to ask whether in a crisis or otherwise, countries shouldn’t at least tentatively take a view on where the exchange rate should be. Of course, they can’t in these circumstances use reserves extensively to defend a particular rate, but they may try to use the interest rate to keep the rate from moving too far. Stanley Fisher. „Crises that don’t happen.“ In: Martin Feldstein (ed). International Capital Flows. Chicago: University of Chicago Press. 1999._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Fischer St I Stanley Fischer Imf Essays From a Time of Crisis Boston: MIT 2005 Feldstein I Martin Feldstein (ed.) International Capital Flows. Chicago: University of Chicago Press. 1999. Chicago 1999 |
||
Authors A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Concepts A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
