Macro-prudential policies are more effective at limiting cross-border capital flows than capital controls, research published by the Bank for International Settlements finds.

In the working paper, Jon Frost, Hiro Ito and René van Stralen conduct a two-stage empirical estimation. They seek to control for endogeneity that could result from countries being more likely to impose macro-prudential measures and capital controls during periods of high inflows. Their data spans 83 advanced and emerging