Collateral Damage: Exchange Controls and International Trade
While new conventional wisdom warns that developing countries should be aware of the risks of premature capital account liberalization, the costs of not removing exchange controls have received much less attention. This paper investigates the negative effects of exchange controls on trade. To minimi...
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1. Verfasser: | |
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Format: | Elektronisch E-Book |
Sprache: | English |
Veröffentlicht: |
Washington, D.C
International Monetary Fund
2007
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Schriftenreihe: | IMF Working Papers
Working Paper No. 07/8 |
Online-Zugang: | UBW01 UEI01 LCO01 SBR01 UER01 SBG01 UBG01 FAN01 UBT01 FKE01 UBY01 UBA01 FLA01 UBM01 UPA01 UBR01 FHA01 FNU01 BSB01 TUM01 Volltext |
Zusammenfassung: | While new conventional wisdom warns that developing countries should be aware of the risks of premature capital account liberalization, the costs of not removing exchange controls have received much less attention. This paper investigates the negative effects of exchange controls on trade. To minimize evasion of controls, countries often intensify inspections at the border and increase documentation requirements. Thus, the cost of conducting trade rises. The paper finds that a one standard-deviation increase in the controls on trade payment has the same negative effect on trade as an increase in tariff by about 14 percentage points. A one standard-deviation increase in the controls on FX transactions reduces trade by the same amount as a rise in tariff by 11 percentage points. Therefore, the collateral damage in terms of foregone trade is sizable |
Beschreibung: | 1 Online-Ressource (27 p) |
ISBN: | 1451865724 9781451865721 |
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spelling | Zhang, Zhiwei Verfasser aut Collateral Damage Exchange Controls and International Trade Zhang, Zhiwei Washington, D.C International Monetary Fund 2007 1 Online-Ressource (27 p) txt rdacontent c rdamedia cr rdacarrier IMF Working Papers Working Paper No. 07/8 While new conventional wisdom warns that developing countries should be aware of the risks of premature capital account liberalization, the costs of not removing exchange controls have received much less attention. This paper investigates the negative effects of exchange controls on trade. To minimize evasion of controls, countries often intensify inspections at the border and increase documentation requirements. Thus, the cost of conducting trade rises. The paper finds that a one standard-deviation increase in the controls on trade payment has the same negative effect on trade as an increase in tariff by about 14 percentage points. A one standard-deviation increase in the controls on FX transactions reduces trade by the same amount as a rise in tariff by 11 percentage points. Therefore, the collateral damage in terms of foregone trade is sizable Online-Ausg Wei, Shang-Jin Sonstige oth http://elibrary.imf.org/view/IMF001/01260-9781451865721/01260-9781451865721/01260-9781451865721.xml Verlag URL des Erstveröffentlichers Volltext |
spellingShingle | Zhang, Zhiwei Collateral Damage Exchange Controls and International Trade |
title | Collateral Damage Exchange Controls and International Trade |
title_auth | Collateral Damage Exchange Controls and International Trade |
title_exact_search | Collateral Damage Exchange Controls and International Trade |
title_exact_search_txtP | Collateral Damage Exchange Controls and International Trade |
title_full | Collateral Damage Exchange Controls and International Trade Zhang, Zhiwei |
title_fullStr | Collateral Damage Exchange Controls and International Trade Zhang, Zhiwei |
title_full_unstemmed | Collateral Damage Exchange Controls and International Trade Zhang, Zhiwei |
title_short | Collateral Damage |
title_sort | collateral damage exchange controls and international trade |
title_sub | Exchange Controls and International Trade |
url | http://elibrary.imf.org/view/IMF001/01260-9781451865721/01260-9781451865721/01260-9781451865721.xml |
work_keys_str_mv | AT zhangzhiwei collateraldamageexchangecontrolsandinternationaltrade AT weishangjin collateraldamageexchangecontrolsandinternationaltrade |