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Effectiveness of capital account regulation: Lessons from Brazil and Peru

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  • Aguirre, Pablo
  • Alonso, José Antonio
  • Jerez, Miguel
Abstract
This paper econometrically analyses the effectiveness of capital account regulation in Brazil and Peru between 2008 and 2013. The analysis, based on new indices that carefully compute regulatory changes in both countries, suggests that Brazil was successful only in shifting the composition of inflows toward longer-term, but not in curbing its aggregate volume. Peru managed to cut short-term inflows addressed to assets issued by the Central Bank, but the short-term inflows received by commercial banks remained unaffected. Regulators’ decisions about the measures selected and the resolute on their implementation, under a cost-benefit analysis, seem to be determinant for effectiveness.

Suggested Citation

  • Aguirre, Pablo & Alonso, José Antonio & Jerez, Miguel, 2019. "Effectiveness of capital account regulation: Lessons from Brazil and Peru," International Review of Economics & Finance, Elsevier, vol. 64(C), pages 176-194.
    • Handle: RePEc:eee:reveco:v:64:y:2019:i:c:p:176-194
    DOI: 10.1016/j.iref.2019.05.011
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    More about this item

    Keywords

    Capital flows; Capital controls; Capital account regulation; Brazil; Peru;
    All these keywords.

    JEL classification:

    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance

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