When are Capital Controls Effective? Evidence from Malaysia and Thailand

Publication | March 2011

This paper examines the impact of capital controls in Malaysia and Thailand during the period 2000-2010 using newly constructed capital control indexes. The results show that capital restrictions introduced in Thailand have no significant effect on inflows, but liberalization of outflows is effective in both Malaysia and Thailand. In addition, capital controls is found to have no impact on real exchange rates in both countries.


  • Abstract
  • Introduction
  • Capital Account Policies in Malaysia and Thailand
  • Capital Control Indexes
  • Assessing Effectiveness of Capital Restrictions
  • Results
  • Conclusion
  • Appendixes
  • References