Optimal Capital Controls and Real Exchange Rate Policies: A Pecuniary Externality Perspective
2014/11/11
研討會日期 : 2014-11-11
時間 : 14:30
主講人 : Professor Christopher Otrok
主持人 : Professor Been-Lon Chen
地點 : Conference Room B110
演講者簡介 : Professor Otrok received his Ph.D. in Economics from University of Iowa in 1999. He is currently Sam B. Cook Professor of Economics at University of Missouri. His research fields are Macroeconomics, Time Series Econometrics, and International Macroeconomics.
演講摘要 : In response to the global financial crisis a new policy paradigm emerged in which capital controls and other quantitative restrictions on credit flows have become part of the standard crisis prevention policy toolkit. A new strand of theoretical literature studies the use of capital controls in a context in which pecuniary externality justifies policy interventions. Within the same theoretical framework adopted in this literature, we show that the optimal design of crisis prevention (ex-ante) policies depends on the effectiveness of crisis management (ex-post) policies. This interaction between ex-ante and ex-post policies gives rise to a new rationale for the use of capital controls. Specifically, we show that when ex-post policies are effective in containing crises, there is no need to intervene ex-ante with capital controls. On the other hand, if crises management policies entail efficiency costs and hence lose effectiveness, then the optimal policy mix consists of both ex-ante and ex-post interventions so that crises prevention policies become desirable. In our model, the optimal policy mix combines capital controls in tranquil times with real exchange rate support to limit its depreciation during crises times and yields welfare gains of more than 1% in consumption equivalence terms.
