## Wednesday, May 12, 2010

Israel graduated into OECD. Theirs is an interesting saga.

In 1977, they liberalised the capital account, and got themselves into a mess. This opening of the capital account was then reversed.

In the 1990s, they got back to this issue, and by this time, the impossible trinity' was better understood. By 2003, all capital controls had been removed, alongside a shift to a floating exchange rate and inflation targeting. Capital outflows were liberalised as well, so their typical configuration involves large capital inflows alongside large capital outflows, which avoids one-way pressures on the exchange rate.

The next few accession candidate countries' for OECD are Estonia, Russia and Slovenia. Here is the list of existing members.

Please note: LaTeX mathematics works. This means that if you want to say $10 you have to say \$10.