Do capital controls deflect capital flows?

Paolo Giordani, Michele Ruta, Hans Weisfeld, Ling Zhu 23 June 2014

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The size and volatility of capital flows to developing countries have increased significantly in recent years (Figure 1), leading many economists to argue that national policies and multilateral institutions are needed to govern these flows (Forbes and Klein 2013, Blanchard and Ostry 2012). The IMF itself has reviewed its position on the liberalisation and management of capital flows, while recognising that “much further work remains to be done to improve policy coordination in the financial sector” (IMF 2012, p. 28).

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Topics:  International finance

Tags:  China, capital flows, spillovers, South Africa, capital controls, Brazil, Capital inflows, international capital flows

Reform of the international monetary and financial system

Oliver Bush, Katie Farrant 21 December 2011

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Much attention has focused on how to reform financial regulation in light of the most recent crisis (see, for instance, Acharya 2011 on this site). But these reforms alone are unlikely to eliminate all of the risks associated with large global capital flows. Broader reform of the international monetary and financial system is essential.

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Topics:  Global crisis Global governance International finance

Tags:  financial regulation, international capital flows, international monetary and financial system

The future of international capital flows

William Speller, Gregory Thwaites 21 December 2011

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The experience of the past decade has demonstrated the challenges that international capital flows can pose for financial stability. Between 2002 and 2007, annual gross international capital flows rose from 5% to 17% of world GDP, and the network of cross-country financial linkages became increasingly complex (Hoggarth et al. 2010). Net international capital flows also rose sharply over this period, with global current-account imbalances (the sum of global deficits and surpluses) doubling from 3% to 6% of world GDP.

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Topics:  Global crisis International finance Monetary policy

Tags:  international capital flows