TY  - JOUR
AU  - Magud, Nicolas
AU  - Reinhart, Carmen M
TI  - Capital Controls: An Evaluation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11973
PY  - 2006
Y2  - January 2006
DO  - 10.3386/w11973
UR  - http://www.nber.org/papers/w11973
L1  - http://www.nber.org/papers/w11973.pdf
N1  - Author contact info:
Nicolas Magud
International Monetary Fund
700 19 Street NW
Washington DC 20431
Tel: (202) 623-8497 
Fax: (202) 589-8497 
E-Mail: nmagud@imf.org

Carmen M. Reinhart
Kennedy School of Government
Harvard University
79 JFK Street
Cambridge, MA 02138
Tel:  617 496 8643
E-Mail: carmen_reinhart@harvard.edu
M1  - published as Nicolas Magud, Carmen M. Reinhart. "Capital Controls: An Evaluation," in Sebastian Edwards, editor, "Capital Controls and Capital Flows in Emerging Economies: Policies, Practices, and Consequences" University of Chicago Press (2007)

AB  - The literature on capital controls has (at least) four very serious apples-to-oranges problems: (i) There is not unified theoretical framework to analyze the macroeconomic consequences of controls; (ii) there is significant heterogeneity across countries and time in the control measures implemented; (iii) there are multiple definitions of what constitutes a "success" and (iv) the empirical studies lack a common methodology -- furthermore these are significantly "overweighted" by a couple of country cases (Chile and Malaysia).  In this paper, we attempt to address some of these shortcomings by: being very explicit about what measures are construed as capital controls.  Also, given that success is measured so differently across studies, we sought to "standardize" the results of over 30 empirical studies we summarize in this paper.  The standardization was done by constructing two indices of capital controls: Capital Controls Effectiveness Index (CCE Index), and Weighted Capital Control Effectiveness Index (WCCE Index).  The difference between them lies only in that the WCCE controls for the differentiated degree of methodological rigor applied to draw conclusions in each of the considered papers.  Inasmuch as possible, we bring to bear the experiences of less well known episodes than those of Chile and Malaysia.
ER  -