Pardee Center Publishes Issue Brief on Capital Account Regulations

The Frederick S. Pardee Center for the Study of the Longer-Range Future has released a new paper in its Issues in Brief series. Titled “Capital Account Regulations for Stability and Development: A New Approach,” the paper was co-authored by Pardee Faculty Fellow Prof. Kevin Gallagher with Stephany Griffith-Jones and and José Antonio Ocampo of Columbia University.

In the policy brief, the authors discuss the ongoing debate about the use of capital account regulations (CARs) employed by some developing countries to stabilize their domestic economies from the impacts of a large influx of foreign short-term capital investments. In response to those efforts, French President Nicolas Sarkozy called on the International Monetary Fund to develop a set of guidelines for the use of capital controls. The goal is for the President to present such guidelines at the G-20 Summit in Cannes this year. The IMF has published a preliminary set of guidelines to that end. This policy brief provides a critical review of those guidelines and offers an alternative protocol for a development friendly-approach to capital account regulation.

The three co-authors also served as co-chairs of the Pardee Center Task Force on Managing Capital Flows for Long-Run Development. The policy brief is an outcome of a meeting of the Task Force held in September at Boston University.

The Pardee Center Task Force is part of the Center’s larger Global Economic Governance Initiative research program led by Prof. Gallagher. A detailed report of the discussions and recommendations stemming from the Task Force meeting will be published by the Pardee Center in 2012. The Task Force was convened by the Pardee Center in collaboration with the Initiative for Policy Dialogue at Columbia University, and the Global Development and Environment Institute at Tufts University.

An electronic version of the paper can be downloaded from the publications library on the Pardee web site. Hard copies are free and may be requested by sending an email to pardee@bu.edu.