Common to nearly all existing de jure capitalcontrolindices is their reliance on information contained in the Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER) published by the International Monetary Fund (IMF). Thus, although drawing on the same source, these indices differ in how, and to what extent, they extract the information provided in the AREAER. Until 1995, the AREAER summarized a country
control measures, the IMF changed reporting procedures starting with the 1996 edition of the AREAER . 2 For each of the above mentioned categories, the “new” AREAER provides dummies in not one but several different subcategories of transactions. In the case of capital account transactions, there are 13 such subcategories, some of which are in turn further disaggregated. 3 Moreover, a distinction is now made between controls on inflows and outflows.
The new reporting procedures have prompted several authors, some within the IMF’s staff, to build capitalcontrol
Andrés Fernández, Mr. Michael W Klein, Mr. Alessandro Rebucci, Mr. Martin Schindler, and Martin Uribe
This paper presents a new dataset of capital control restrictions on both inflows and outflows of 10 categories of assets for 100 countries over the period 1995 to 2013. Building on the data in Schindler (2009) and other datasets based on the analysis of the IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER), this dataset includes additional asset categories, more countries, and a longer time period. The paper discusses in detail the construction of the dataset and characterizes the data with respect to the prevalence and correlation of controls across asset categories and between controls on inflows and controls on outflows, the aggregation of the separate categories into broader indicators, and the comparison of this dataset with other indicators of capital controls.
Schindler’s data add value to existing capitalcontrolindices by providing information at a more disaggregated level for 91 countries from 1995 to 2005. Like most of the earlier de jure capitalcontrolindices, the new database relies on information contained in the IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER). Although the new indices strike a relatively favorable balance regarding country coverage and the level of detail, they are constrained by a somewhat short time series dimension due to the limited information provided by the
countries (see Table 7.1 for the full country list by region).
Common to nearly all existing de jure capitalcontrolindices is their reliance on information contained in the IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER). Thus, although drawing on the same source, these indices differ in how, and to what extent, they extract the information provided in the AREAER. Until 1995, the AREAER summarized a country’s openness to capital flows using a binary dummy variable, where 1 represents a restricted capital account and 0 represents an
capital controls in three important ways. First, it creates a new index of capital controls based on the changes in de jure capital controls. This index provides a more nuanced tool to track the evolution of capital controls than other capitalcontrolindices, which measure the existence of controls on a more aggregated level. Furthermore, the index, contrary to other existing capitalcontrolindices, allows high-frequency observations, since it tracks changes in the respective regulation monthly. Second, unlike other studies, this one separates temporary capital
This paper estimates the effectiveness of capital controls in response to inflow surges in Brazil, Colombia, Korea, and Thailand in the 2000s. Controls are generally associated with a decrease in inflows and a lengthening of maturities, but the relationship is not statistically significant in all cases, and the effects are temporary. Controls are more successful in providing room for monetary policy than dampening currency appreciation pressures. We argue that the macroeconomic impact of capital controls depends on the extensiveness of the policy, the level of capital market development, the support provided by other policies, and the persistence of capital flows.
internal and external factors, including the domestic and foreign interest rates and prices, the real exchange rate, and capital Controls. 13 The study covers the period from January 1991 to October 2000, and the evolution of capital Controls during this period is shown in Figure 5.7 . Table 5.7 describes the data. 14
Figure 5.7. CapitalControls
Net foreign portfolio assets in Malaysia, billions of U.S. dollars
Estimated based on Bank Negara Malaysia Cash
C. Emre Alper, Ms. Wenjie Chen, Mr. Jemma Dridi, Hervé Joly, and Mr. Fan Yang
and regional groupings in sub-Saharan Africa . The Common Market for Eastern and Southern Africa (COMESA) is slightly less open than the EAC, but the other groupings are much less so. 8
Detailed and disaggregated capitalcontrolindices reveal the underlying drivers of these broad trends (based on Fernandez and others 2015 ; Figure 17 ) . We focus on Kenya, Tanzania, and Uganda from the EAC (based on data availability from 2015 AREAER), and South Africa as a comparator from sub-Saharan Africa. While Kenya and Uganda have slightly lower degrees of restrictions on