The Dismantling of Capital Controls after Bretton Woods and Latin American Productivity

Abstract

The recent economic history of global integration has been characterized by a dismantling of capital controls and increased foreign direct investment (FDI). This paper explores the role of impediments to international capital mobility, foreign direct investment, and technology diffusion in shaping Latin American economic growth. First, the paper summarizes and quantifies the effects of the Bretton Woods international financial system in Latin America. Then, I study the consequences of capital controls--and their dismantling--on FDI and trade-induced technological advancements and their role in shaping local development, especially in the 1990s after the implementation of several trade liberalization policies.