Andreasen, Eugenia; Bauducco, Sofía; Dardati, Evangelina - 2021
This paper studies the effect of capital controls on misallocation and welfare in an economy with financial constraints … more for this group of firms, and for young firms that are still trying to reach their optimal scale. In terms of welfare …, the model predicts a sizable aggregate loss of 2.39 percent when capital controls are introduced, with welfare decreasing …
