Abstract:

This study aims to review the theoretical and empirical literature on capital controls after the Global Crisis. The theoretical literature that emerged after the global crisis claims that anti-conjunctive prudent capital controls could enhance macroeconomic and financial stability. In the empirical literature that evolved during the same period, it is found that capital controls were often not used anti-conjunctive, but in the post-crisis period some countries succeeded in implementing the controls anti-conjunctive. It is also found that capital controls were used for both warning and centralistic purposes, but after the crisis the share of warning drive increased. In most studies, capital controls have been shown to be effective in changing the composition of capital entries, increasing monetary policy autonomy and relieving financial vulnerabilities. Furthermore, numerous studies find that controls could reduce the volume of capital income and the exchange rate pressure. On the other hand, it is shown that capital controls may lead to negative spread effects on other countries.

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