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Capital controls and foreign currency denomination

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  • Fernando Garcia-Barragan
  • Guangling Dave Liu

Abstract

This paper studies the effectiveness of capital controls with foreign currency denomination and its welfare implications. To do this, we develop a general equilibrium model with financial frictions and banking, in which assets and liabilities are denominated in both domestic and foreign currencies. We propose a non-pecuniary capital-control policy that limits the gap between foreign-currency […]

Suggested Citation

  • Fernando Garcia-Barragan & Guangling Dave Liu, 2017. "Capital controls and foreign currency denomination," Working Papers 671, Economic Research Southern Africa.
    • Handle: RePEc:rza:wpaper:671
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    More about this item

    Keywords

    business analysis; central bank; Economic crisis; Firms and Development; Market Structure; Other Macroeconomic Variables; Welfare;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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