Doesn't this look like fun?
We’ve heard a lot about how, with interest rates near (or below!) zero and bond-buying’s apparently diminishing returns, that central banks don’t have any arrows left in their quivers. We’ve also heard that desperate times call for desperate measures and that necessity is the mother of invention. Or, when suffering from a Hollywood-like lack of creativity, a sequel.
Small changes in the yuan have touched off big swings in markets across the world, and the dollar has shot up against just about every currency. Amid the turmoil, financial- and economic-policy makers are advocating a tactic once anathema to all but the most mismanaged economies: capital controls….
“The general presumption was that capital-account liberalization was always good, and capital controls were nearly always bad,” said Olivier Blanchard, who arrived at the International Monetary Fund as chief economist in 2008 and left the fund last year. “I’ve seen the thinking change, partly because it was already wrong then, and because it was particularly wrong in the crisis.”