A Simple Measure of the Intensity of Capital Controls

Author/Editor:

Francis E. Warnock ; Hali J Edison

Publication Date:

November 1, 2001

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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. After presenting the measure, we compare it to other existing measures of capital controls and briefly describe empirical applications concerning home bias, capital flows to emerging markets, and the effects of financial liberalization on the cost of capital.

Series:

Working Paper No. 2001/180

Subject:

English

Publication Date:

November 1, 2001

ISBN/ISSN:

9781451859119/1018-5941

Stock No:

WPIEA1802001

Pages:

33

Please address any questions about this title to publications@imf.org