David, Antonio C.2012-03-302012-03-302008Cambridge Journal of Economics0309166Xhttps://hdl.handle.net/10986/5579In this paper we attempt to analyse whether price-based controls on capital inflows are successful in insulating economies against external shocks. We present results from vector autoregressive (VAR) models, which indicate that Chile and Colombia, countries that adopted controls on capital inflows, seem to have been relatively well insulated against certain types of external disturbances. Subsequently, we use the autoregressive distributive lag (ARDL) approach to co-integration in order to isolate the effects of the capital controls on the pass-through of external disturbances to domestic interest rates in those economies. We conclude that there is evidence that the capital controls have allowed for greater policy autonomy.ENCurrent Account AdjustmentShort-term Capital Movements F320International Linkages to DevelopmentRole of International Organizations O190Development Planning and Policy: Trade PolicyFactor MovementForeign Exchange Policy O240Journal ArticleWorld Bank