LEADER 02684cam a22004334i 4500001 99131259960306421 005 20240731073712.0 006 m o d 008 020129s2024 dcu o i00 0 eng d 020 979-84-00-28509-7 035 (CKB)5860000000546153 035 (IMF)WPIEA2024164 035 (EXLCZ)995860000000546153 040 DcWaIMF |beng |erda 100 1 Chang, Roberto. 245 10 Capital Controls on Outflows: New Evidence and a Theoretical Framework / |cRoberto Chang, Andrés Fernández, Humberto Martinez. 246 Capital Controls on Outflows 264 1 Washington, D.C. : |bInternational Monetary Fund, |c2024. 300 1 online resource (83 pages) 336 text |btxt |2rdacontent 337 computer |bc |2rdamedia 338 online resource |bcr |2rdacarrier 490 1 IMF Working Papers 520 3 We study capital controls on outflows (CCOs) in situations of macroeconomic and financial distress. We present novel empirical evidence indicating that CCO implementation is associated with crises and declines in GDP growth. We then develop a theoretical framework that is consistent with such empirical findings and also yields policy and welfare lessons. The theory features costly coordination failures by foreign investors which can sometimes be avoided by suitably tailored CCOs. The benefits of CCOs as coordination devices can make them optimal even if CCOs entail deadweight losses; if the latter are large, however, CCOs are detrimental for welfare. We show that optimal CCOs can suffer from time inconsistency, and also how political opportunism may limit CCO policy. Hence government credibility and reputation building emerge as critical for the successful implementation of CCOs. 588 Description based on print version record. 650 7 Financial Crises |2imf 650 7 International Finance: General |2imf 650 7 Macroeconomic Aspects of International Trade and Finance: General |2imf 650 7 Policy Coordination |2imf 650 7 Policy Designs and Consistency |2imf 650 7 Policy Objectives |2imf 776 |z979-84-00-28371-0 700 1 Fernández, Andrés. 700 1 Martinez, Humberto. 830 0 IMF Working Papers; Working Paper ; |vNo. 2024/164 906 BOOK