Macroeconomic analyses of capital controls face a number of imposing challenges and have yielded mixed results to date. This paper takes a different approach and surveys an emerging literature that evaluates various microeconomic effects of capital controls and capital account liberalization. Several key themes emerge. First, capital controls tend to reduce the supply of capital, raise the cost...

• We study the impact of capital account liberalization on bank funding structures. Our analysis includes nearly 600 Latin American banks since 1990s. Capital lowers equity and raises interbank funding. The shifts are stronger for large informationally less opaque banks. effects when global money market rates lower. Using a sample almost in America, we show that share total liabilities banking ...

Interdependence among nations has been on the rise since the last century and is rapidly increasing in this era of globalization and liberalization of economies. The trans -country flows are in all areas includ ing financial capital, human resources, tradable commodities, environmental resources and services, and intellectual property. This international interdependence has contributed to signi...

“...capital account liberalization is...similar to the issue of how the human race should make use of fire. Fire warms our homes. It cooks our food, our internal combustion engines. It powers our automobiles and trucks and our turbojets. It powers our airplanes. No doubt, fire is very useful, and we are not going to give up its manifold benefits. On the other hand, fire can also burn you down a...

1 Paper prepared for UNDP/IDB/World Bank/CEPAL project " Balance of Payments Liberalization, Distribution and Poverty in Latin America " and originally presented at project seminar in Rio de Janeiro, other seminar participants, as well as to Geske Dijkstra and an anonymous referee for helpful comments on a previous draft. The Institute of Social Studies is Europe's longest-established centre of...