Contagious policies: An analysis of spatial interactions among countries' capital account policies

Arbeitspapier

Countries' capital account policies might be contagious in the sense that domestic policies are driven by other countries' policies. A model of strategic interactions is developed to show that countries' best response to policy changes elsewhere consists in imitating this policy. Using a spatial econometric model, the hypothesis of policy interactions is tested in a large panel data set. The evidence shows that capital account policies are contemporaneously correlated across countries. Concerning fundamentals, the move to a fixed exchange rate regime and an increase in real world interest rates are correlated with the imposition of capital account restrictions.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 80

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; International Investment; Long-term Capital Movements ; International Policy Coordination and Transmission
• Subject: Capital Controls ; Strategic Interaction ; Panel Data Analysis

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Steiner, Andreas
• Event: Veröffentlichung
• (who): Osnabrück University, Institute of Empirical Economic Research
• (where): Osnabrück
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/66512