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Exchange and Capital Controls as Barriers to Trade
Author:
Ms. Natalia T. Tamirisa
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Series:
IMF Working Papers
Volume/Issue:
Volume 1998: Issue 081
Language:
English
Publication Date:
01 Jun 1998
DOI:
https://doi.org/10.5089/9781451955194.001
ISBN:
9781451955194
ISSN:
1018-5941
Pages:
19
Keywords:
WP; control; trade; exchange; unmeasured trade distortion; exchange controls; capital controls; development; statistics yearbook; financing trade; enforcement of control; indices of control; capital controls as well as control; liberalization of control; pervasiveness of control; bilateral trade flow; effectiveness of control; effects of control; trade in factor; Exchange restrictions; Trade barriers; Exports; Tariffs; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper considers the effect of exchange and capital controls on trade in the gravity-equation framework, in which bilateral exports depend on the distance between countries, the countries’ size and wealth, tariff barriers, and exchange and capital controls. The extent of exchange and capital controls is measured by unique indices. In view of the degree to which countries have liberalized their exchange systems, controls on current payments and transfers are found to be a minor impediment to trade, while capital controls significantly reduce exports into developing and transition economies. Thus, further capital account liberalization could significantly foster trade.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund