Costinot, Arnaud; Lorenzoni, Guido; Werning, Iván - 2011
"This paper develops a simple theory of capital controls as dynamic terms-of-trade manipulation. We study an infinite … the welfare of its representative agent, while the other country is passive. We show that capital controls are not guided … international capital flows converge to zero. Although our theory emphasizes interest rate manipulation, the country's net financial …