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Capital flow management policies in emerging market economies: Are they successful in mitigating drastic changes of capital flows?
Author(s) -
Hwang Inbin,
Park Hyungsoon,
Park Sunyoung
Publication year - 2018
Publication title -
international journal of finance and economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 39
eISSN - 1099-1158
pISSN - 1076-9307
DOI - 10.1002/ijfe.1629
Subject(s) - capital flows , capital (architecture) , economics , emerging markets , monetary economics , financial capital , capital deepening , capital formation , flow (mathematics) , physical capital , capital outflow , macroeconomics , market economy , human capital , mechanics , liberalization , archaeology , history , physics
This paper constructs a new database for capital flow management policies (CFMs) in 16 emerging market economies from 1999 to 2008 and analyses their effect on extreme capital flow movements. We show that CFMs are effective in mitigating drastic changes of capital flows. We also find that CFMs do not have significant impacts on capital flow volumes. The results suggest that CFMs could be employed as policy toolkits for mitigating extreme capital flow movements without distorting capital flows in a normal period.