| Abstract: | An intervention analysis of the Mexican capital control policy of August 1982 shows the policy to have a negative, but temporary, impact on the Mexican deviation from interest rate parity. Previous studies concerning the impact of capital control inteventions have predicted positive effects of capital control policies. These stem from the effective tax capital controls place on foreign capital inflows. When capital controls are also designed to restrict domestic capital outflows, however, their net effect becomes an empirical, rather than theoretical, question. |
