Capital Controls and the Timing of Exchange Regime Collapse / Daekuen Park, Jeffrey Sachs.

By:

Park, Daekuen

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w2250.Publication details: Cambridge, Mass. National Bureau of Economic Research 1987.Description: 1 online resource: illustrations (black and white)Subject(s):

F - International Economics

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Abstract: This paper investigates the nature of balance of payments crises in regimes with capital controls. It extends earlier work on capital controls by assuming that households manage their consumption and asset portfolios to maximize intertemporal utility. Our main result is that capital controls are effective in delaying, but not preventing, a breakdown of a fixed exchange rate regime in the presence of money-financed fiscal deficits.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w2250 (Browse shelf(Opens below))	Not For Loan

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May 1987.

This paper investigates the nature of balance of payments crises in regimes with capital controls. It extends earlier work on capital controls by assuming that households manage their consumption and asset portfolios to maximize intertemporal utility. Our main result is that capital controls are effective in delaying, but not preventing, a breakdown of a fixed exchange rate regime in the presence of money-financed fiscal deficits.