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Published in:
1999 | OriginalPaper | Chapter
No Capital Mobility between Union and Rest of the World
Author : Prof. Dr. Michael Carlberg
Published in: European Monetary Union
Publisher: Physica-Verlag HD
Included in: Professional Book Archive
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As a rule, in this book, we assume that there is perfect capital mobility between the union and the rest of the world. As an exception, in this chapter, we assume that there is no capital mobility between the union and the rest of the world. The case of capital immobility can occur for two reasons. First, if foreign debt of the union exceeds a critical level. And second, if capital controls are introduced to prevent speculative attacks.