Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/66512
Authors: 
Steiner, Andreas
Year of Publication: 
2010
Series/Report no.: 
Working Paper, Institute of Empirical Economic Research, University of Osnabrück 80
Abstract: 
Countries' capital account policies might be contagious in the sense that domestic policies are driven by other countries' policies. A model of strategic interactions is developed to show that countries' best response to policy changes elsewhere consists in imitating this policy. Using a spatial econometric model, the hypothesis of policy interactions is tested in a large panel data set. The evidence shows that capital account policies are contemporaneously correlated across countries. Concerning fundamentals, the move to a fixed exchange rate regime and an increase in real world interest rates are correlated with the imposition of capital account restrictions.
Subjects: 
Capital Controls
Strategic Interaction
Panel Data Analysis
JEL: 
C23
F21
F3
F42
Document Type: 
Working Paper

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