Capital controls and foreign reserves against external shocks: Combined or alone?
Rafael Cezar
(1)
,
Eric Monnet
(2, 3)
Eric Monnet
- Fonction : Auteur
- PersonId : 743081
- IdHAL : eric-monnet
- ORCID : 0000-0003-1445-8883
- IdRef : 127336184
Résumé
Long considered suboptimal, capital controls and FX interventions are now recognized as prudential measures. Yet, whether they are used in combination remains an open question. Thanks to a rich dataset from 1950, we investigate how the response of FX reserves to an exogenous US monetary shock depends on capital controls. The response is insignificant with a very close capital account. By contrast, for a significant number of countries, FX reserves and capital controls are combined to tame the effects of an international financial shock. Yet, as countries open up financially, FX reserves replace capital controls. There is no one-sizes-fits-all recipe.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
Capital controls and foreign reserves against external shocks: Combined or alone?
|
Résumé |
en
Long considered suboptimal, capital controls and FX interventions are now recognized as prudential measures. Yet, whether they are used in combination remains an open question. Thanks to a rich dataset from 1950, we investigate how the response of FX reserves to an exogenous US monetary shock depends on capital controls. The response is insignificant with a very close capital account. By contrast, for a significant number of countries, FX reserves and capital controls are combined to tame the effects of an international financial shock. Yet, as countries open up financially, FX reserves replace capital controls. There is no one-sizes-fits-all recipe.
|
Auteur(s) |
Rafael Cezar
1
, Eric Monnet
2, 3
1
Banque de France -
Banque de France
( 183299 )
- France
2
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
3
PJSE -
Paris Jourdan Sciences Economiques
( 578027 )
- 48 boulevard Jourdan 75014 Paris
- France
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Internationale
|
Langue du document |
Anglais
|
Nom de la revue |
|
Date de publication |
2023-10
|
Volume |
137
|
Public visé |
Scientifique
|
Page/Identifiant |
102906
|
Domaine(s) |
|
Mots-clés (JEL) |
|
Mots-clés |
en
Capital controls, Foreign exchange interventions, Foreign exchange reserves, Global financial cycle
|
DOI | 10.1016/j.jimonfin.2023.102906 |
UT key WOS | 001077098300001 |
Loading...