Please use this identifier to cite or link to this item: https://apothesis.eap.gr/handle/repo/34298
Title: Capital Controls: A tool to protect an economy under pressure? The Cases of Cyprus, a Eurozone member, and Iceland
Authors: Gad, George
Advisor: Petrakis, Emmanouil
Keywords: Capital Controls;Capital Flows;Financial Crisis;Cyprus;Iceland;Bail in;Bail out;Κεφαλαιακοί έλεγχοι;Κεφαλαιακές ροές;Οικονομική κρίση;Κύπρος;Ισλανδία
Issue Date: 3-Sep-2017
Abstract: The present study puts emphasis on a popular discussion concerning the effectiveness of capital controls when these measures are used as a tool to protect an economy under pressure. We focus on the recent cases of Iceland and Cyprus and examine the extent to which controls on free capital movement applied in case of these two countries are effective and deliver the outcomes that motivated their imposition. We aim to identify any common behavior of the main macroeconomic indicators in each country, before and after the imposition of capital controls. Given the monetary policy restrictions imposed by the Euro-zone and the fact that Cyprus unlike Iceland, belongs to the union, we are using the results to compare and evaluate if the state of belonging to Euro-zone represents a negative factor for the success of capital controls. The methodology used puts emphasis on locating significant differences on basic descriptive statistics (means, standard deviation) of the economic indicators under inspection before and after the imposition of capital controls. The results indicate that controls were only partially successful. In case of Iceland controls did not manage to control the pressure over the foreign exchange rate and in case of Cyprus controls achieved only partially to control outflows. Belonging to Euro-zone was not proven to be a negative factor for measures’ success in case of Cyprus. Given that Greece and Cyprus are both parts of the EU, the results of the current research could be further extended by examining the effectiveness of controls and the influence that the EU operating framework has on them, in the case of Greece.
Appears in Collections:MBA Διπλωματικές Εργασίες

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