The Effects of Capital Controls on Exchange Rate Volatility and Output

This paper extends the Dornbusch model of overshooting exchange rates to discuss both exchange rate and output effects of capital controls that involve additional costs for International asset transactions.We show that, on the one hand, such capital controls have the merit of reducing the volatility of exchange rate volatility in the sort run and induces costs for the real sector in the form of lower equilibrium output levels. [F32, F41]

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Year of publication:	2002
Authors:	Frenkel, M. ; Shimidt, G. ; Stadtmann, G. ; Christiane, Nickle
Published in:	International Economic Journal. - Taylor & Francis Journals, ISSN 1016-8737. - Vol. 16.2002, 4, p. 27-51
Publisher:	Taylor & Francis Journals

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005475674