POLI 445 Lecture Notes - Lecture 19: Capital Control, Developing Country, Single European Act
2 Jan 2020
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Document Summary
Capital controls looks obsolete; economic competition amongst economically developed state. Breakdown of bretton woods, mix of policy outcomes, exchange rates; countries try to do different things with their exchange rate policy. Post 1975, exchange rate choices; range from using someone else"s currency to fully floating. Most countries adopt open capital markets in 1990"s: seem to suggest that this is going to be new method in finance, floating in free market situation. Emphasizing domestic monetary policy autonomy a key choice. Not just a choice between fixed and floating: what is this middle ground look like and how reliable are that, second is that states have different preferences on choosing mundell- Fleming options: countries adopting floating exchange rates and free capital flow, but not same for all countries; some countries still have capital controls, fixed exchange. Those consists of no sperate legal tender: using currency of different country. Ecuador for ex. currency board: new domestic currency which have relation with their reserve.
