Capital control is the monetary policy device that a country government (ie Sovereign power) uses to regulate the flow of investment-oriented money into and out of a country or currency. General sentiment about capital controls has changed in the recent decade since the Asian Currency Crisis in 1997-1998. Originally, as the march of globalization began to really get underway with the formalization of the World Trade Organization and the Uruguay Round of General Agreement on Tariffs and Trade (GATT) during President Bill Clinton's tenure, it was thought and in fact urged by the International Monetary Fund and others, that developing countries needed to liberalize their capital controlled environments and embrace the free flow of capital coursing throughout the global economy. Monetary policy is the government or central bank process of managing money supply to achieve specific goals—such as constraining inflation, maintaining an exchange rate, achieving full employment or economic growth. ... Invest redirects here. ... Globalization is an umbrella term for a complex series of economic, social, technological, cultural and political changes seen as increasing interdependence, integration and interaction between people and companies in disparate locations. ... WTO Logo The World Trade Organization (WTO) is an international, multilateral organization, which sets the rules for the global trading system and resolves disputes between its member states, all of whom are signatories to its approximately 30 agreements. ... The Uruguay Round was a trade negotiation lasting from September 1986 to April 1994 which transformed the General Agreement on Tariffs and Trade into the World Trade Organization. ... General Agreement on Tariffs and Trade (typically abbreviated GATT) functioned as the precursor to the World Trade Organization. ... General Agreement on Tariffs and Trade (usually abbreviated GATT) functions as the foundation of the WTO trading system, and remains in force, although the 1995 Agreement contains an updated version of it to replace the original 1947 one. ... William Jefferson Bill Clinton (born William Jefferson Blythe III on August 19, 1946) was the 42nd President of the United States, serving from 1993 to 2001. ... The logo of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is an international organization that oversees the global financial system by monitoring exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ... Capital has a number of related meanings in economics, finance and accounting. ...

As it became clear that countries doing this, including Malaysia, Thailand and Mexico, essentially ceded control of their economies to external forces, namely whimsical capital movements, hot money and capital flight, and the United States Federal Reserve, and countries that didn't, like China and India, retained control and were not nearly as vulnerable to the volatility of whimsical capital movement, the logic began to turn, to the current logic that capital controls are advisable for smaller economies to use, and to transition away from them only over long, general evolutionary timelines. Malaysia is but one example of a country that switched regimes, from open in the late 1990's, to closed following China's model, realizing that it's financial institutions and general corporate environment was not yet ready for unadulterated exposure to the blistering competition coming from the powerful economies like the United States, United Kingdom and Japan. Hot money is used in economics to refer to funds which flow into a country to take advantage of a favourable interest rate, and therefore obtain higher returns. ... Seen in Asian markets in the 1990s capital flight is when assets and/or money rapidly flow out of a country. ... The Federal Reserve System is headquartered in the Eccles Building on Constitution Avenue in Washington, DC. The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central banking system of the United States. ... In Financial economics, a financial institution acts as an agent that provides financial services for its clients. ...

There is still some degree of criticism of capital controls, especially with regards to China; however most of this criticism is uninformed, coming from politicians and the manufacturing sector in the U.S. that seize on this topic because little opposition is likely to be raised to their comments, for two reasons: Most of the environments where these comments are made do not include scholarly review or even audiences qualified to check the errant statements; and second, because the arguments are typically so absurd and so in contravention to generally accepted economic practice that no one knowledgeable enough to point this out takes them seriously. See Senator Charles Schumer's comments about levying a 27.5% protectionary tarriff on Chinese goods-- This is the very type of thing that triggered the protectionism that started the downward spiral into the Great Depression. A politician is an individual who is a formally recognized and active member of a government, or a person who influences the way a society is governed through an understanding of political power and group dynamics. ... Peer review (known as refereeing in some academic fields) is a scholarly process used in the publication of manuscripts and in the awarding of funding for research. ... Charles Ellis Chuck Schumer (born November 23, 1950) is an American politician. ... Protectionism is the economic policy of restraining trade between nations, through methods such as high tariffs on imported goods, restrictive quotas, a variety of restrictive government regulations designed to discourage imports, and anti-dumping laws in an attempt to protect domestic industries in a particular nation from foreign take-over... The Great Depression was a worldwide economic downturn, starting in 1929 (although its effects were not fully felt until late in 1930) and lasting through most of the 1930s. ...