ABSTRACT
By the mid-1990s many developing countries had removed capital controls, following the example of developed economies. Important criticisms on these types of controls arise from the emphasis on its costs, such as increased domestic interest rates and reduced access to international credit markets. That view is based on the idea that developing countries would benefit from the liberalization process by getting access to cheaper credit from developed markets, promoting growth and stability. As a consequence, advocates for capital market liberalization sparked a discussion regarding the need for liberalizing the flows of international capital.
