Capital account regulation as part of the macroeconomic regime: comparing Brazil in the 1990s and 2000s

ABSTRACT Brazil was one of the emerging countries that had a stronger trend of currency appreciation from the 2nd quarter of 2009 to July 2011. Under this context that can be understood the implementation of capital account regulation (CAR) after 2009, which was complemented with another kind of regulation, the so-called FX Derivatives Regulation (FXDR). This paper shows that only when Brazilian government adopted these two kinds of regulations simultaneously, the policy effectiveness increased in terms of protecting the Brazilian currency from upward pressures. Brazilian experience also highlights that it is not possible to establish a hierarchy between temporary instruments to manage capital flows and permanent prudential measures, as supported by the IMF current approach.

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What Makes Capital Account Regulation Effective? Comparing the Experiences of Brazil, Peru, and Iceland

Journal of Economic Issues ◽

10.1080/00213624.2020.1787052 ◽

2020 ◽

Vol 54 (3) ◽

pp. 772-797

Author(s):

Pablo Aguirre ◽

José Antonio Alonso

Keyword(s):

Capital Account ◽

Account Regulation

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Financial liberalization, capital account regulation and economic policy in Brazil

Financial Stability and Growth ◽

10.4324/9781315857121-23 ◽

2014 ◽

pp. 301-325 ◽

Cited By ~ 1

Author(s):

Luiz Fernando de Paula

Keyword(s):

Economic Policy ◽

Financial Liberalization ◽

Capital Account ◽

Account Regulation

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Capital account regulation as part of the macroeconomic regime: comparing Brazil in the 1990s and 2000s

European Journal of Economics and Economic Policies Intervention ◽

10.4337/ejeep.2018.0033 ◽

2018 ◽

Vol 15 (3) ◽

pp. 313-334 ◽

Cited By ~ 1

Author(s):

Barbara Fritz ◽

Daniela Magalhães Prates

Keyword(s):

Comparative Analysis ◽

Financial Crisis ◽

Financial Market ◽

Capital Flows ◽

Global Financial Crisis ◽

Capital Account ◽

International Capital ◽

Inflation Stabilization ◽

Account Regulation ◽

The Global Financial Crisis

Capital account regulation (CAR) has experienced profound reconsideration since the global financial crisis. This new debate focuses on the macroeconomic gains of regulating international capital flows in terms of reducing external and financial vulnerability, but it does not consider relevant aspects relating to the context in which these regulations are implemented. In this paper, we undertake a comparative analysis of similar types of CAR applied in Brazil during the 1990s and 2000s. Based on this analysis, we conclude that for the design of CAR, which is relevant for its effectiveness, institutional features of both the financial market and the macroeconomic regime, shaped by macroeconomic constraints, are relevant. For the case of Brazil, we conclude that, contrary to the 2000s, the strong preference given to inflation stabilization in the 1990s, together with high external vulnerability, strongly limited the CAR's design of this period.

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Capital Account Regulation and National Autonomy: The Political Economy of the New Welfare Economics

Contexto Internacional ◽

10.1590/s0102-8529.2019430100008 ◽

2021 ◽

Vol 43 (1) ◽

pp. 173-197

Author(s):

Luiza Peruffo ◽

Pedro Perfeito da Silva ◽

André Moreira Cunha

Keyword(s):

Emerging Economies ◽

Capital Mobility ◽

Global Financial Crisis ◽

Welfare Economics ◽

Capital Account ◽

Policy Space ◽

Flow Management ◽

Management Measures ◽

National Autonomy ◽

Account Regulation

Abstract The 2007-2009 Global Financial Crisis (GFC) eroded the consensus around the benefits of capital mobility within mainstream economics. Against this background, this paper discusses to what extent the new mainstream position on capital flow management measures, based on the New Welfare Economics, expands the policy space of developing and emerging economies (DEEs). This paper argues that the new position can be classified as an embedded neoliberal one, given that it keeps liberalization as its ultimate goal, while nonetheless accepting to mitigate some of its harmful consequences. After comparing the capital account policies of China and Brazil, this paper concludes that the policy prescriptions of the New Welfare Economics do not lead to higher levels of national autonomy for DEEs and are likewise unable to curb financial instability in these countries.

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