This feature of the international system inhibits the process of global rebalancing and could restrain the current recovery. Thus, at most, capital controls should be seen as just one of many tools that can be used to manage capital inflows, and one to be used only in particularly challenging situations.
The IMF work that I mentioned earlier concludes that capital controls may be appropriate in conjunction with other policy tools as long as countries meet certain conditions. Foreign currency reserves should already be adequate, and exchange rates should not be undervalued.