Cover IMF Working Papers
Capital Controls in Times of Crisis – Do They Work?
Author:
Apoorv Bhargava
Search for other papers by Apoorv Bhargava in
Current site
Google Scholar
PubMedClose
,
Romain Bouis
Search for other papers by Romain Bouis in
Current site
Google Scholar
PubMedClose
,
Annamaria Kokenyne
Search for other papers by Annamaria Kokenyne in
Current site
Google Scholar
PubMedClose
,
Manuel Perez-Archila
Search for other papers by Manuel Perez-Archila in
Current site
Google Scholar
PubMedClose
,
Umang Rawat 0000000404811396 https://isni.org/isni/0000000404811396 International Monetary Fund

Search for other papers by Umang Rawat in
Current site
Google Scholar
PubMedClose
, and
Ms. Ratna Sahay
Search for other papers by Ms. Ratna Sahay in
Current site
Google Scholar
PubMedClose
Series:
IMF Working Papers
Volume/Issue:
Volume 2023: Issue 067
Language:
English
Publication Date:
17 Mar 2023
DOI:
https://doi.org/10.5089/9798400236235.001
ISBN:
9798400236235
ISSN:
1018-5941
Pages:
37
Keywords:
Capital controls; capital outflows; financial crises; inflow control; outflow controls Introduced; outflow control; controls on outflow; tightening control; Capital account; Capital flows; Caribbean; Global
Legal-disclaimer:
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.
Download PDF (2.3 MB) Download Epub
This paper provides an analysis of the use and effects of capital controls in 27 AEs and EMDEs which experienced at least one financial crisis between 1995 and 2017. Countries often turn to using capital controls in crisis: some ease inflow controls while others tighten controls on outflows. A key finding is that countries with pervasive controls before the start of the crisis are shielded compared to countries with more open capital accounts, which see a significant decline in capital flows during crises. In contrast, the effectiveness of capital controls introduced during crises appears to be weak and difficult to identify. There is also some evidence that the introduction of outflow controls during crises is negatively associated with sovereign debt ratings, but that investors may actually forgive with time.
  • Collapse
  • Expand
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2023: Issue 067