Can Short-Term Capital Controls Promote Capital Inflows?

Controls on Capital Inflows: Do they Work?∗

This paper analyzes the effectiveness of controls on capital inflows. In particular, we analyze in great detail the Chilean experience with the use of the unremunerated reserve requirement. We examine the effects of the controls applied in Chile in 1991–98 on interest rates, real exchange rate, and the volume and composition of capital inflows. The effects are elusive and it is difficult to pin...

Debt maturity choices when capital inflows can suddenly stop

Much of the literature on capital inflow sudden stops uses models with short term debt only but draws conclusions about the role of debt maturities in crises. In this paper short and long term debt are introduced in an infinite horizon, representative agent model that is consistent with modern open economy macroeconomic models of the type presented in Obstfeld and Rogoff (1996). Phase diagrams ...

Capital inflows and investment in developing countries

Capital Inflows in a General Equilibrium Setting

Equilibrium Setting Carlos C. Bautista* A computable general equilibrium (CGE) model is constructed to examine the effects of capital inflows on the sectors of the Philippine economy. The CGE model has five production sectors, two households and two primary inputs. Under a flexible exchange rate regime, it is shown that capital inflows lead to an appreciation of the domestic currency. Nontradab...

What Lures Cross-Border Venture Capital Inflows?

The change in the business model of venture capitalists from investing locally towards investing across borders started to intensify in the late 1990s. According to a dataset of European and NorthAmerican countries, we find that countries with higher expected growth and higher lagged stock market returns receive larger net cross-border venture capital inflows. Thus, portfolio companies located ...