Capital controls and international interest rate differentials

Journal article | Zeitschriftenartikel

The literature on interest rate differentials caused by capital controls is mostly case based yet. The present paper tries to find general evidence how large the interest rate differentials - and thus the distortions of capital markets - actually are. Advocates of capital controls generally argue, that capital controls (should) affect capital flow composure rather than the total, analogue to Tobin's idea concerning currency markets only. Based on a new measure for capital controls, which is including information on the direction of the flows, which are subject to the control, it is shown here with a sample of 86 countries from 1997 to 2003, that the interest rate effects are to severe to sign this assumption. The results indicate, that capital controls, as they are commonly employed, have significant impact on interest rates, hence risking accordingly high growth impeding effects.

Object Details

• Extent: Seite(n): 681-688
• Language: Englisch
• Notes: Status: Postprint; begutachtet (peer reviewed)

References and Relationships

• Bibliographic citation: Applied Economics, 42(6)

Classification and Topics

• Subject: Wirtschaft ; Volkswirtschaftslehre

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): El-Shagi, Makram
• Event: Veröffentlichung
• (where): Vereinigte Staaten von Amerika
• (when): 2010

Further information

• DOI: https://doi.org/10.1080/00036840701720770
• URN: urn:nbn:de:0168-ssoar-240335
• Rights: GESIS - Leibniz-Institut für Sozialwissenschaften. Bibliothek Köln
• Last update: 21.06.2024, 4:26 PM CEST