Essays in capital flow management

Capital flow management measures (CFMs) are policy instruments that can be used to smooth economic shocks. However, there is limited understanding of the use of CFMs due to data limitations. In the first chapter, I develop a new index to measure CFMs for 42 emerging and developing countries (EMDEs) from 1960 to 2022. I estimate the initial CFM level in 1960 and update the index daily. The index captures granular changes in CFMs and allows comparison across countries and over time, helping to assess the evolving CFM role in the EMDE policy toolkit. In the second chapter, I use a generalized ordered logit model to analyze the drivers of CFMs in EMDEs. My findings suggest that authorities adjust CFMs largely for countercyclical reasons. In the third chapter, I identify that the previously positive and significant correlation between capital openness and foreign flows has disappeared after the Global Financial Crisis (GFC). While the policy implications of this new index are still preliminary, its high-frequency nature allows for analyzing within-year effects of CFMs, paving the way for future research to better understand their nuanced impacts on macroeconomic conditions.