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CAPITAL CONTROLS AND DEVIATIONS FROM PROPOSED INTEREST RATE PARITY; MEXICO 1982
Author(s) -
Spiegel MARK M.
Publication year - 1990
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1990.tb00813.x
Subject(s) - economics , interest rate parity , capital (architecture) , capital control , monetary economics , cost of capital , capital deepening , parity (physics) , interest rate , capital intensity , capital consumption allowance , capital formation , financial capital , macroeconomics , capital flows , microeconomics , incentive , geography , archaeology , profit (economics) , physics , particle physics
An intervention analysis of the Mexican capital control policy of August 1982 shows the policy to have a negative, but temporary, impact on the Mexican deviation from interest rate parity. Previous studies concerning the impact of capital control inteventions have predicted positive effects of capital control policies. These stem from the effective tax capital controls place on foreign capital inflows. When capital controls are also designed to restrict domestic capital outflows, however, their net effect becomes an empirical, rather than theoretical, question.