IDEAS home Printed from https://ideas.repec.org/p/ris/adbewp/0578.html
   My bibliography  Save this paper

Capital Account Policies in Emerging Asian Economies: Are They Effective in the 2000s?

Author

Listed:
  • Jongwanich, Juthathip

    (Thammasat University)

Abstract

This paper examines the effectiveness of capital account policy in terms of its ability to affect the volume and composition of capital flows, relieve pressures on real exchange rates, and foster monetary policy independence. Ten emerging Asian economies are used as case studies to assess the effectiveness of capital account policy during 2000–2015. The results suggest that some types of capital controls are effective in reducing the volume of capital flows and pressure on real exchange rates. The choice of exchange rate regime matters in terms of the effectiveness of capital controls for fostering monetary policy independence. Although some types of capital controls are effective in creating macroeconomic stability, implementing capital account policy needs to be undertaken with caution. This is because substitution or complementarity among capital controls is evident, both within and across countries in the region. It seems that strong economic fundamentals are more important than capital account policy for changing the composition of capital inflows toward more stable and long-term flows.

Suggested Citation

  • Jongwanich, Juthathip, 2019. "Capital Account Policies in Emerging Asian Economies: Are They Effective in the 2000s?," ADB Economics Working Paper Series 578, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0578
    as

    Download full text from publisher

    File URL: https://www.adb.org/publications/capital-account-policies-emerging-asian-economies
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Cesar Rodrigues van der Laan & André Moreira Cunha & Marcos Tadeu Caputi Lélis, 2017. "On the effectiveness of capital controls during the Great Recession: The Brazilian experience (2007–2013)," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 40(2), pages 203-222, April.
    2. Natalia T. Tamirisa, 1999. "Exchange and Capital Controls as Barriers to Trade," IMF Staff Papers, Palgrave Macmillan, vol. 46(1), pages 1-4.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dollar, David & Kraay, Aart, 2006. "Neither a borrower nor a lender: Does China's zero net foreign asset position make economic sense?," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 943-971, July.
    2. Svaleryd, Helena & Vlachos, Jonas, 2002. "Markets for risk and openness to trade: how are they related?," Journal of International Economics, Elsevier, vol. 57(2), pages 369-395, August.
    3. Chen, Jinzhao & Qian, Xingwang, 2016. "Measuring on-going changes in China's capital controls: A de jure and a hybrid index data set," China Economic Review, Elsevier, vol. 38(C), pages 167-182.
    4. Chong-En Bai & Shang-Jin Wei, 2000. "Quality of Bureaucracy and Open-Economy Macro Policies," NBER Working Papers 7766, National Bureau of Economic Research, Inc.
    5. Juthathip Jongwanich & Archanun Kohpaiboon, 2012. "Effectiveness of Capital Controls: Evidence from Thailand," Asian Development Review (ADR), World Scientific Publishing Co. Pte. Ltd., vol. 29(02), pages 50-93, December.
    6. Barli Suryanta, 2012. "The Dynamics Spillover Of Trade Between Indonesia And Its Counterparts In Terms Of Afta 2015 : A Modified Gravity Equation Approach," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 15(2), pages 55-74, October.
    7. Koopman, Robert B. & Arce, Hugh M. & Balistreri, Edward J. & Fox, Alan K., 2002. "Large Scale CGE Modeling at the United States International Trade Commission," Conference papers 331022, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Bai, Chong-en & Wei, Shang-Jin, 2001. "The quality of bureaucracy and capital account policies," Policy Research Working Paper Series 2575, The World Bank.
    9. Lee E. Ohanian & Paulina Restrepo-Echavarria & Mark L. J. Wright, 2013. "Bad Investments and Missed Opportunities? Capital Flows to Asia and Latin America, 1950-2007," Working Papers 2014-38, Federal Reserve Bank of St. Louis.
    10. Miklós Koren, 2003. "Financial Globalization, Portfolio Diversification, and the Pattern of International Trade," IMF Working Papers 2003/233, International Monetary Fund.
    11. Wei, Shang-Jin & Zhang, Zhiwei, 2007. "Collateral damage: Exchange controls and international trade," Journal of International Money and Finance, Elsevier, vol. 26(5), pages 841-863, September.
    12. Natalia Tamirisa, 2003. "Trade in Financial Services and Capital Movements," Journal of Financial Services Research, Springer;Western Finance Association, vol. 24(1), pages 47-66, August.
    13. Svaleryd, Helena & Vlachos, Jonas, 2000. "Does Financial Development Lead to Trade Liberalization?," Research Papers in Economics 2000:11, Stockholm University, Department of Economics.
    14. Dellas, Harris & Hess, Martin, 2005. "Financial development and stock returns: A cross-country analysis," Journal of International Money and Finance, Elsevier, vol. 24(6), pages 891-912, October.
    15. Bozhechkova, Alexandra (Божечкова, Александра) & Goryunov, Evgeny (Горюнов, Евгений) & Sinelnikov-Murylev, Sergey (Синельников-Мурылев, Сергей) & Trunin, Pavel V. (Трунин, Павел), 2017. "Capital Controls: World Experience and Lessons for Russia [Ограничения На Движение Капитала: Мировой Опыт И Уроки Для России]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 2, pages 8-43, April.
    16. Barbara Pfeffer, 2006. "Trade Policy and Risk Diversification," Volkswirtschaftliche Diskussionsbeiträge 126-06, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    17. Ellyne, Mark & Chater, Rachel, 2013. "Exchange Controls and SADC Regional Integration: Measuring SADC Restrictiveness," MPRA Paper 58649, University Library of Munich, Germany.
    18. Chokri Zehri, 2020. "The Domestic Impacts And Spillovers Of Capital Controls," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 65(227), pages 31-66, October –.
    19. George Kopits, 2002. "Central European EU Accession and Latin American Integration: Mutual Lessons in Macro-Economic Policy Design," Working Papers 75, Oesterreichische Nationalbank (Austrian Central Bank).
    20. Justin Quinton & Glenn Jenkins & Godwin Olasehinde-Williams, 2024. "How Do Household Coping Strategies Evolve with Increased Food Insecurity? An Examination of Nigeria’s Food Price Shock of 2015-2018," Working Paper 1520, Economics Department, Queen's University.

    More about this item

    Keywords

    capital flows; capital restrictions; emerging Asia;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:adbewp:0578. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Orlee Velarde (email available below). General contact details of provider: https://edirc.repec.org/data/eradbph.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.