Capital flows, capital controls, and exchange rate policy
Bibliographic record
Abstract
Many emerging market economies use alternative forms of capital controls.Often the use of capital controls is related to the defense of the exchange rate.This paper examines the welfare case for capital controls, and the interaction between capital controls and the exchange rate.The main question is whether capital controls may be justified, in order to gain independence in monetary policy, while at the same time pegging the exchange rate.Our results suggest a very conditional yes to this question, but only when there are capital outflows.Surprisingly, there is also a similar case for capital controls in face of capital inflows if the economy is on a freely floating exchange rate.But there are always better policies, which if available will eliminate the case for capital controls.As a corollary, our results suggest an optimal exchange rate stance for an economy experiencing capital flows; a country receiving capital inflows should follow a fixed exchange rate, while a country experiencing capital outflows should allow the exchange rate to float .
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.001 |
| Meta-epidemiology (narrow) | 0.001 | 0.001 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.003 | 0.005 |
| Science and technology studies | 0.002 | 0.017 |
| Scholarly communication | 0.000 | 0.001 |
| Open science | 0.002 | 0.002 |
| Research integrity | 0.001 | 0.001 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; both teacher heads agree on what is shown here.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".