OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Capital flow deflection under the magnifying glass

In a financially interconnected world, individual countries’ policy choices affect other economies and can become a source of international shocks. Leveraging on a new quarterly dataset of capital control adjustments, we find renewed evidence that the introduction of capital controls in one economy increases capital inflows to other similar borrowing economies.


Keywords: Capital controls, Bilateral capital flows, Externalities, Spillovers, Emerging markets
JEL: F38: International Economics / International Finance / International Financial Policy: Financial Transactions Tax; Capital Controls; F21: International Economics / International Factor Movements and International Business / International Investment; Long-Term Capital Movements; F42: International Economics / Macroeconomic Aspects of International Trade and Finance / International Policy Coordination and Transmission; F32: International Economics / International Finance / Current Account Adjustment; Short-Term Capital Movements
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