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Are Capital Controls Effective in the 21st Century? the Recent Experience of Colombia

This paper assesses the effects of capital controls imposed in Colombia in 2007 on capital flows and exchange rate dynamics. The results suggest that the controls were successful in reducing external borrowing, but had no statistically significant impact on the volume of non- FDI flows as a whole. W...

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Bibliographic Details
Main Author: Clements, Benedict
Other Authors: Kamil, Herman
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2009
Series:IMF Working Papers
Subjects:
Pension Spending
Short-term Capital Movements
Social Security And Public Pensions
Option Pricing
Contingent Pricing
Current Account Adjustment
Balance Of Payments
Long-term Capital Movements
Currency
Exports And Imports
International Economics
Expenditure
Futures Pricing
Foreign Exchange
Capital Flows
Capital Inflows
Capital Controls
Pensions
Capital Movements
Exchange Rates
Public Finance
International Investment
Colombia
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper assesses the effects of capital controls imposed in Colombia in 2007 on capital flows and exchange rate dynamics. The results suggest that the controls were successful in reducing external borrowing, but had no statistically significant impact on the volume of non- FDI flows as a whole. We find no evidence that restrictions to capital mobility moderated the appreciation of Colombia's currency, or increased the degree of independence of monetary policy. We also find that controls have significantly increased the volatility of the exchange rate. Additional research is needed to assess the effects of capital controls on financial stability
Physical Description:27 pages
ISBN:9781451871777

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