TY - JOUR
T1 - Capital mobility and the output-inflation tradeoff
AU - Loungani, Prakash
AU - Razin, Assaf
AU - Yuen, Chi Wa
PY - 2001
Y1 - 2001
N2 - Identifying determinants of the output-inflation tradeoff has been a key issue in business cycle research. We provide evidence that in countries with greater restrictions on capital mobility, a given reduction in the inflation rate is associated with a smaller loss in output. This result is shown to be consistent with the predictions of a version of the Mundell-Fleming model. Restrictions on capital mobility are measured using the IMF's Annual Report on Exchange Rate Arrangements and Exchange Restrictions. Estimates of the output-inflation tradeoff are taken from previous studies (viz., Lucas [Am. Econ. Rev. 63 (1973)] and Ball, Mankies and Romer 19 (1988)).
AB - Identifying determinants of the output-inflation tradeoff has been a key issue in business cycle research. We provide evidence that in countries with greater restrictions on capital mobility, a given reduction in the inflation rate is associated with a smaller loss in output. This result is shown to be consistent with the predictions of a version of the Mundell-Fleming model. Restrictions on capital mobility are measured using the IMF's Annual Report on Exchange Rate Arrangements and Exchange Restrictions. Estimates of the output-inflation tradeoff are taken from previous studies (viz., Lucas [Am. Econ. Rev. 63 (1973)] and Ball, Mankies and Romer 19 (1988)).
KW - Capital controls
KW - Capital mobility
KW - Openness
KW - Output-inflation tradeoff
UR - http://www.scopus.com/inward/record.url?scp=0035122601&partnerID=8YFLogxK
U2 - 10.1016/S0304-3878(00)00132-2
DO - 10.1016/S0304-3878(00)00132-2
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AN - SCOPUS:0035122601
SN - 0304-3878
VL - 64
SP - 255
EP - 274
JO - Journal of Development Economics
JF - Journal of Development Economics
IS - 1
ER -