Panicking at the specter of today's fast-moving capital markets, some economists and policy makers have abandoned their preference for free-flowing capital and embraced restrictions against cross-border investment. Such restrictions are referred to as "capital controls."

For example, some nations forbid citizens from owning assets such as stocks, bonds or homes in foreign countries. Others limit foreign ownership of domestic assets.

• Capital controls were the norm around the world -- even in the U.S. -- until the 1960s and 1970s, and lingered in France and Italy until the late 1980s.

• China and India still use them, and Malaysia reimposed them on September 1.

• Critics say that the price of capital controls in India has been prolonged isolation and poverty for 25 years -- so that country has been lifting controls and expects to finish the job by 2000.

• One of the countless ways to get around capital controls is for an exporter to underbill foreign customers -- and arrange for them to hide the excess in foreign assets.

Critics warn that capital controls simply don't work in a world of free trade and porous borders.