I exploit a natural experiment in South Korea to examine the real effects of macroprudential foreign exchange (FX) regulations designed to reduce risk-taking by financial intermediaries. By using crossbank variation in the regulation's tightness, I show that it causes a reduction in the supply...

In the wake of the 2008-2009 global financial crisis, the macroeconomic discussion has returned to the topic of proactive macroprudential policies. One proactive approach, the use of loan-to-value (LTV) policies to curb booming property markets, has long been used by Hong Kong's monetary...

The implications of the costs of doing business in foreign countries for the resulting capital market equilibrium are studied. When transferring capital goods across national boundaries, the costs incurred are quasi-fixed in a one-good, two-country, intertemporal model with complete financial...

We analyze the implications for monetary policy when deficient aggregate demand can cause a permanent loss in potential output, a phenomenon we term output hysteresis. In the model, the incomplete stabilization of a temporary shortfall in demand reduces the return to innovation, thus reducing...

In this paper, we describe the operation of the foreign exchange (FX) market in Brazil and discuss the relations between prices of derivatives and spot prices. A literature review of interventions in the FX market is done. Then, we study, in a descriptive way, the interventions of the Central...

The phenomenon liberalization, with the influence of the Bretton Woods system that collapsed subsequent to the Oil Shock in 1970, first began with the efforts to discover markets to value the investments of these countries in the developed countries. In order to provide the desired capital...

Capital control is used as policy toolkit for safeguarding domestic economy from the volatility of capital flows. However, the effect of capital control is rather far fetched as the signaling effect of capital control can moderate investor's outlook about domestic economy and thereby outweighs...

By focusing on the episodes of substantial capital account liberalisation and adopting a new methodology, this paper provides new evidence on the dilemma and global financial cycle theory. I first identify the capital account liberalisation episodes for 95 countries from 1970 to 2016, and then...

We review the literature on the effectiveness of capital controls and macroprudential measures. First, we explain the purposes and examples of capital controls and macroprudential policies. We then analyze various theoretical models and empirical findings from prior studies that investigate the...

Driven by waves of foreign capital inflows and outflows, Indonesia, the Republic of Korea, and Thailand - among several other emerging markets - have resorted to capital control policy since 2006. Are capital controls effective? Controls on capital inflows have been experiencing a renaissance...