We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Capital Controls and the Real Exchange Rate.
- Authors
Van Wijnbergen, Sweder
- Abstract
Capital import taxes lower (raise) world (home) interest rates. This shifts home expenditure from the present to the future and foreign expenditure from the future to today. With identical home and foreign expenditure patterns, the change in the composition of world expenditure has no effects on demand for any commodity. Then capital controls have no effect on the real exchange rate. When consumers prefer home goods, capital controls cause lower demand today for home goods. In that case, capital controls lower the real exchange rate today. This result is mitigated when the country imposing capital controls is a large debtor.
- Subjects
TAXATION of foreign investments; INTEREST rates; ECONOMIC demand; FOREIGN trade regulation; FOREIGN exchange rates
- Publication
Economica, 1990, Vol 57, Issue 225, p15
- ISSN
0013-0427
- Publication type
Article
- DOI
10.2307/2554078