Closing time: Reputational constraints on capital account policy in emerging markets

被引:3
作者
Liao, Steven [1 ]
McDowell, Daniel [2 ]
机构
[1] Univ Calif Riverside, Dept Polit Sci, Riverside, CA 92521 USA
[2] Syracuse Univ, Dept Polit Sci, Syracuse, NY 13244 USA
关键词
Capital controls; Emerging markets; Capital flow volatility; Reputation; POLITICAL-ECONOMY; FINANCIAL OPENNESS; LIBERALIZATION; INTERDEPENDENCE; DETERMINANTS; INSTITUTIONS; CRISES; MATTER; IMF; LAW;
D O I
10.1007/s11558-021-09433-1
中图分类号
F [经济];
学科分类号
02 ;
摘要
Do international reputational concerns constrain governments' economic policy choices? We assess this question by analyzing emerging market decisions to tighten restrictions on capital outflows. While policymakers should be more likely to tighten restrictions to protect their economies as capital flow volatility (CFV) increases, investors view outflow controls as heterodox policies that violate investment contracts. We argue that the effect of CFV on outflow controls depends on the use of controls in peer markets. When peers are open, governments anticipate that controls will come at a high cost to their market reputations as heterodox measures send a negative signal to investors among a crowd of liberal peers. Conversely, when peers are closed, using controls should do less damage to an economy's reputation. For 25 emerging markets from 1995-2015, we show that CFV is associated with outflow controls, but only when market peers are already closed, suggesting reputational concerns can limit policy autonomy.
引用
收藏
页码:543 / 568
页数:26
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