attention to the welfare consequences of this type of market intervention. Our paper provides a simple, optimizing framework in … which the welfare consequences of capital controls can be assessed. Two main issues are considered. First, how do capital …

exchange rate regime generates identifiable welfare losses of 2-8 percent of GDP on import markets and up to 15 percent on … export markets. These excess burdens have increased substantially with the growing difference of exchange rates. The welfare … analysis allows some conclusions regarding the optimal reform strategy: (i) welfare losses will decline overproportionally as …