To date there has been greater awareness that the sudden interruption and reversal of capital flows can cause financial crisis. However for the most part it is thought that the volatility of capital flows applies predominantly to short-term flows and not longer-term capital flows such as FDI....

The East Asian currency crisis culminated in IMF packages for all severely affected Asian crisis economies except Malaysia. Malaysia received much attention when it introduced capital controls as part of its crisis management strategy. This paper examines the effectiveness of capital controls...