And that is, you don't put water into a leaky bucket.

These models, like the leaky bucket, work well in most situations.

But the first few systems were these leaky, loud power guzzlers that Martha Stewart would definitely never have approved.

Yet imposing capital controls on inflows is difficult and sometimes leaky. Macroprudential controls on credit growth are useful, but sometimes ineffective in stopping asset bubbles when low interest rates continue to underpin generous liquidity conditions.

MUNICH With pain and misgiving, the United States Congress bailed out Wall Street in order to prevent a meltdown of America s financial system. But the 700 billion to be used may flow into a leaky bucket, and so may the billions provided by governments throughout the world.

The fourth option is to impose capital controls on inflows (or liberalize controls on outflows). Leaving aside the issue of whether or not such controls are leaky, evidence suggests that controls on inflows of short term hot money do not affect the overall amount of capital inflows. Thus, such controls are ineffective in reducing short term cyclical pressure on the currency to appreciate.