| Abstract: | This study aims to examine the effect of capital controls on composition capital flows in Malaysia. Under predetermined exchange rate rules, the contribution of selective controls is to increase monetary autonomy, without taxing private long-term capital flow or foreign direct investment. Although the selective capital controls in Malaysia tax only some components of capital flows, the study shows, after controlling other factors, the controls not only reduce the total flows (hence increase monetary autonomy), but to some extent affected the private long-term flows. |
