A Simple Measure of the Intensity of Capital Controls
Year: 2001
Type: article
Abstract: We present a readily available monthly measure of the intensity of capital controls across 29 emerging market countries that is based on the degree of restrictions on foreign ownership of equities. The initial opening of a market as given by our measure corresponds well with the liberalization dates of Bekaert and Harvey (2000a). In addition, our measure provides information on the extent of the initial opening as well as the evolution of the liberalization over time. We discuss two versions of the measure. One version provides the better indication of the extent of controls at a point in time, and is thus better suited for cross-sectional analysis. The other version—smoothed of the relative price effects of asymmetric shocks provides a better indication of changes in controls, and is thus more appropriate for time series work. After describing the measure, we compare it to other existing measures of capital controls and briefly describe some empirical applications.
Authors: Hali J. Edison, Francis E. Warnock
Institutions: Federal Reserve, Federal Reserve Board of Governors
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4299534127