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Capital Controls and Capital Flows in Emerging Economies

Policies, Practices, and Consequences

Some scholars argue that the free movement of capital across borders enhances welfare; others claim it represents a clear peril, especially for emerging nations. In Capital Controls and Capital Flows in Emerging Economies, an esteemed group of contributors examines both the advantages and the pitfalls of restricting capital mobility in these emerging nations.

In the aftermath of the East Asian currency crises of 1997, the authors consider mechanisms that eight countries have used to control capital inflows and evaluate their effectiveness in altering the maturity of the resulting external debt and reducing macroeconomic vulnerability. This volume is essential reading for all those interested in emerging nations and the costs and benefits of restricting international capital flows.

Table of Contents


     Sebastian Edwards


     1. Capital Flows in a Globalized World: The Role of Policies and Institutions
     Laura Alfaro, Sebnem Kalemli-Ozcan, and Vadym Volosovych
     Comment: Gerd Häusler

     2. Capital Controls, Sudden Stops, and Current Account Reversals
     Sebastian Edwards
     Comment: Alan M. Taylor

     3. Currency Mismatches, Debt Intolerance, and Original Sin: Why They Are Not the Same and Why It Matters
     Barry Eichengreen, Ricardo Hausmann, and Ugo Panizza
     Comment: Joshua Aizenman

     4. The Microeconomic Evidence on Capital Controls: No Free Lunch
     Kristin J. Forbes
     Comment: Charles W. Calomiris

     5. The International Exposure of U.S. Banks: Europe and Latin America Compared
     Linda S. Goldberg
     Comment: Matías Braun


     6. International Borrowing, Capital Controls, and the Exchange Rate: Lessons from Chile
     Kevin Cowan and José De Gregorio

     7. International Borrowing and Macroeconomic Performance in Argentina
     Kathryn M. E. Dominguez and Linda L. Tesar
     Comment: Nicolas Magud

     8. Capital Flows and Controls in Brazil: What Have We Learned?
     Ilan Goldfajn and André Minella

     9. The Chinese Approach to Capital Inflows: Patterns and Possible Explanations
     Eswar Prasad and Shang-Jin Wei

     10. South Korea’s Experience with International Capital Flows
     Marcus Noland
     Comment: Gita Gopinath

     11. Malaysian Capital Controls: Macroeconomics and Institutions
     Simon Johnson, Kalpana Kochhar, Todd Mitton, and Natalia Tamirisa
     Comment: Peter Blair Henry

     12. Capital Flows and Exchange Rate Volatility: Singapore’s Experience
     Basant K. Kapur
     Comment: Chair Chari

     13. India’s Experience with Capital Flows: The Elusive Quest for a Sustainable Current Account Deficit
     Ajay Shah and Ila Patnaik

     14. Capital Controls: An Evaluation
     Nicolas Magud and Carmen M. Reinhart

Author Index
Subject Index

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