テクニカルレポート

ディスカッション／ワーキング・ペーパー

text

Discussion Papers In Economics And Business. 2012, 12-03

Testing the Effectiveness of Market-Based Controls : Evidence from the Experience of Japan with Short-Term Capital Flows in the 1970s

Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University

英語

text

2012-03

http://www2.econ.osaka-u.ac.jp/library/global/dp/1203.pdf

The paper tests the effectiveness of marginal reserve requirements employed by the Japaneseauthorities in the 1970s to influence short-term capital flows, thereby contributing to the ongoingdebate on the use of capital controls—market- or price-based ones in particular. While the casefor using market-based controls almost entirely relies on the mixed evidence from the experienceof Chile with unremunerated reserve requirements in the 1990s, testing for their effectiveness onthe volume of inflows is hampered by the endogeneity of such a measure, which is typicallyimposed or intensified when inflows surge. We address this problem by applying the method ofpropensity score matching and find that an increase in marginal reserve requirements modestlyreduced the volume of short-term capital inflows through non-resident free-yen accounts. Theimpact was not statistically significant, however, implying that the price elasticity of short-termcapital flows was small. We conclude that market-based controls must be nearly prohibitive,perhaps combined with administrative measures, to be effective in a meaningful way.

13400

Testing the Effectiveness of Market-Based Controls : Evidence from the Experience of Japan with Short-Term Capital Flows in the 1970s

Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University

英語

2012-03

Discussion Papers In Economics And Business

12-03

https://hdl.handle.net/11094/13400

http://www2.econ.osaka-u.ac.jp/library/global/dp/1203.pdf