Arbeitspapier
Capital controls, exchange rate volatility and risk premium
Capital controls lower the variability of the exchange rate and reduce the risk premium as well as the domestic interest rate. On the other hand, capital controls reduce the number of noise traders and, therefore, the risk-bearing capacity of the market, leading to higher interest rates and a lower growth potential of the economy. The identification of these two effects which work in opposite directions are the result of a study on the effect of capital controls on the exchange rate, the domestic interest rate, and the microstructure of the foreign exchange market in a small open economy.
- Language
-
Englisch
- Bibliographic citation
-
Series: Research Notes ; No. 5
- Classification
-
Wirtschaft
Current Account Adjustment; Short-term Capital Movements
Open Economy Macroeconomics
- Subject
-
Capital Controls
Capital Flows
Risk Premium
Kapitalverkehrspolitik
Tobinsteuer
Wechselkurs
Volatilität
Risikoprämie
Monetäre Wechselkurstheorie
Noise Trading
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Frenkel, Michael
Stadtmann, Georg
- Event
-
Veröffentlichung
- (who)
-
Deutsche Bank Research
- (where)
-
Frankfurt a. M.
- (when)
-
2002
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Frenkel, Michael
- Stadtmann, Georg
- Deutsche Bank Research
Time of origin
- 2002
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