The timing of exchange regime collapse under capital controls

Daekeun Park, Jeffrey D. Sachs

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

This paper investigation the Nature of balance-of payments crises in regimes with capital controls. It extends earlier works on Capital controls by assuming that households manage their consumption and asset portfolios to maximize intertemporal utility. Our main result is that capital controls are effectives in delaying, but not preventing, a breakdown of a fixed exchange rate regime in the presence of money- financed deficits. [F31].

Original languageEnglish
Pages (from-to)123-141
Number of pages19
JournalInternational Economic Journal
Volume10
Issue number4
DOIs
StatePublished - 1996 Jan 1

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