Capital Controls

Case Analysis

Only in the waning years of the 20th Century international financial markets begin to enjoy the freedom from state regulation that they had experienced before the first world war. By 2002, the international capital markets had grown to be enormous – $ 1.2 trillion flowed around the globe each day. The massive size of the market presents policy makers with a serious challenge, as they were forced to fight with the costs and benefits of such mobile capital. This note refers to the modern short … Read more »

Only in the waning years of the 20th Century international financial markets begin to enjoy the freedom from state regulation that they had experienced before the first world war. By 2002, the international capital markets had grown to be enormous – $ 1.2 trillion flowed around the globe each day. The massive size of the market presents policy makers with a serious challenge, as they were forced to fight with the costs and benefits of such mobile capital. This note is just the modern history of capital controls and summarizes scholarship on the advantages and disadvantages of international financial regulation.
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from
Rawi Abdelal,
Laura Alfaro
6 pages.
Release Date: 03 April 2002. Prod #: 702082-PDF-ENG
Capital controls HBR case solution