2012•SSRN Electronic JournalOpen access
ADB Forum on the Use of Capital Controls
Jonathan David Ostry, Maria Socorro Gochoco‐Bautista, Changyong Rhee, Michael M. Hutchison, Chalongphob Sussangkarn, Eli M. Remolona, Masahiro Kawai
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Abstract
Widespread liberalization in the 1980s and 1990s enabled the freer movement of capital across international borders. Alongside large and often volatile movements in capital flows, risks to macro stability and the health of the financial system have led many countries to reconsider the wisdom of continuing to allow unimpeded flows of capital. Asia’s strong recovery in the aftermath of the Global Financial Crisis of 2007-2008 as well as continuing problems in the EU presage even larger flows of capital to Asia. This has led to a rethinking about the wisdom of unfettered cross-border capital flows and ways to manage capital flows, including the potential usefulness of capital controls.The ADB Forum on the Use of Capital Controls held on 14 July 2011 examined the context in which such controls could be useful as part of a broader menu of tools in the policymaker’s toolkit as well as the experiences of selected Asian countries in using de jure capital controls.