Do Multiple Exchange Rates Stop Capital Outflows? Evidence from Developing Countries

 

  

 

Session: Sudden Stops

 

  

Presenter

Leopoldo Avellan, University of Maryland, ESPOL and Banco Central del Ecuador

 

  

Author(s)

Leopoldo Avellan, University of Maryland, ESPOL and Banco Central del Ecuador

 

  

Sponsor

The Tinker Foundation Scholarship

 

  

 

 

This paper evaluates the effectiveness of multiple exchange rates systems as a policy tool to stop capital outflows. Controlling for push and pull factors that drive capital flows, and using data from 45 developing countries for the 1980-2001 period, it cannot find empirical support for the claim that segmenting the foreign exchange market stops capital outflows.

 

 

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