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How Effective are Capital Controls? Evidence from Malaysia. Asian Development Review, Vol. 29(2), pp. 1-47

dc.contributor.authorPrema-chandra Athukorala
dc.contributor.authorJuthathip Jongwanich
dc.description.abstractThis paper examines the role of capital controls as a macroeconomic policy tool in light of the Malaysian experience. It consists of an econometric analysis of quarterly data over the period 1990–2010 using newly constructed capital inflow and outflow policy indexes as well as analytical narratives of episodes of controls imposed on inflows (1994) and outflows (1998–1999). The findings suggest that well-targeted controls have the potential to tame both short-term capital inflows and outflows without exerting a backwash effect on foreign direct investment, at least in the short to medium term. Controls on capital inflows introduced in the first half of 1994 helped moderate accumulation of short-term capital flows, particularly short-term bank credit. During 1998–1999, carefully designed temporary capital controls were successful in providing Malaysian policymakers a viable setting for applying the standard Keynesian therapy.
dc.publisherAsian Development Bank
dc.rightsCC BY 3.0 IGO
dc.titleHow Effective are Capital Controls? Evidence from Malaysia. Asian Development Review, Vol. 29(2), pp. 1-47
dc.subject.adbEconomic policy
dc.subject.adbEconomic Analysis
dc.title.seriesAsian Development Review
dc.title.volumeVolume 29, Number 2, pp. 1-47
dc.contributor.imprintAsian Development Bank
oar.authorAthukorala, Prema-chandra
oar.authorJongwanich, Juthathip

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  • Asian Development Review
    The Asian Development Review (ADR) is a professional journal for disseminating the results of economic and development research relevant to Asia and the Pacific. Since 1983, the ADR has been an important part of the history of the Asian Development Bank and its mission to reduce poverty across Asia and the Pacific.

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