Capital controls and monetary policy in sudden-stop economies

• 成果类型: Article
• 署名作者: Devereux, Michael B.; Young, Eric R.; Yu, Changhua
• 署名单位: University of British Columbia; Zhejiang University; University of Virginia; Peking University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2018.07.016
• 发表日期: 2019
• 页码: 52-74
• 关键词: Sudden stops; Pecuniary externality; monetary policy; capital controls; Time-consistency

摘要

The dangers of high capital flow volatility and sudden stops have led economists to promote the use of capital controls as an addition to monetary policy in emerging market economies. This paper studies the benefits of capital controls and monetary policy in a small open economy with financial frictions, nominal rigidities, and sudden stops. Without commitment, the optimal monetary policy should sharply diverge from price stability. The policymakers will also tax capital inflows in a crisis, but such taxes may be welfare reducing. With commitment, capital controls involve a mix of current capital inflow taxes and future capital flow subsidies. The optimal policy will never involve macro-prudential capital inflow taxes or a departure from price stability, whether or not commitment is available. (C) 2018 Elsevier B.V. All rights reserved.