Liberalization of the Capital Account: Experiences and Issues

60 Pages Posted: 15 Feb 2006

See all articles by Donald J. Mathieson

Donald J. Mathieson

International Monetary Fund (IMF)

Liliana Rojas-Suarez

Center for Global Development

Date Written: June 1992

Abstract

This paper reviews the experience with capital controls in industrial and developing countries, considers the policy issues raised when the effectiveness of capital controls diminishes, examines the medium-term benefits and costs of an open capital account, and analyzes the policy measures that could help sustain capital account convertibility. As the effectiveness of capital controls eroded more rapidly in the 1980s than in earlier periods, new constraints were placed on the formulation of stabilization and structural reform programs. However, experience suggests that certain macroeconomic, financial, and risk management policies would allow countries to attain the benefits of capital account convertibility and reduce the financial risks created by an open capital account.

JEL Classification: F21, F31, F32, F36

Suggested Citation

Mathieson, Donald J. and Rojas-Suarez, Liliana, Liberalization of the Capital Account: Experiences and Issues (June 1992). IMF Working Paper No. 92/46, Available at SSRN: https://ssrn.com/abstract=884797

Donald J. Mathieson (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Liliana Rojas-Suarez

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

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