The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Capital Controls

  • Kristin J. Forbes
Reference work entry


Capital controls can take many different forms and are broadly defined as any restrictions on the movement of capital across a country’s borders. This article focuses on the debate on the merits of capital controls for emerging markets and developing economies. It describes the potential costs and benefits of capital controls, focusing on the recent empirical literature evaluating the impact of capital controls.


Bretton Woods system Bubbles Capital account liberalization Capital controls Distortions Dutch disease encaje (Chile) Fixed exchange rates Foreign direct investment International monetary fund Keynes, J. M. Kindleberger, C. Monetary policy Nurkse, R. Portfolio investment Risk diversification 

JEL Classifications

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Kristin J. Forbes
    • 1
  1. 1.