A Survey of Academic Literature on Controls Over International Capital Transactions

Download or read book A Survey of Academic Literature on Controls Over International Capital Transactions written by Michael P. Dooley and published by . This book was released on 2006 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews recent theoretical and empirical work on controls over international capital movements. Theoretical contributions reviewed focus on quot;second bestquot; arguments for capital market restrictions as well as arguments based on multiple equilibria. The empirical literature suggests that controls have been quot;effectivequot; in the narrow sense of influencing yield differentials. But there is little evidence that controls have helped governments meet policy objectives, with the exception of reduction in the governments` debt service costs, and no evidence that controls have enhanced economic welfare in a manner suggested by theory.