Capital Account Liberalization : What Do Cross-Country Studies Tell Us?

By Barry Eichengreen. 2001

645 citations recorded by the source corpus.

Capital account liberalization, it is fair to say, remains one of the most controversial and least understood policies of our day. One reason is that different theoretical perspectives have very different implications for the desirability of liberalizing capital flows. Another is that empirical analysis has failed to yield conclusive results. The answer, another influential strand of thought contends, is that this efficient-markets paradigm is fundamentally misleading when applied to capital flows. Limits on capital movements are a distortion. It is an implication of the theory of the second best that removing one distortion need not be welfare enhancing when other distortions are present.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/a3f2c0991c38f915734e1ddc58dcce0bfbda4a92

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Citations in the corpus

Why We Learn Nothing from Regressing Economic Growth on Policies (2012, neutral): “� (which is also unobservable, with � 2 (0; 1 )).”
Linkages between financial development, financial instability, financial liberalisation and economic growth in Africa (2018, background): “Eichengreen et al (2001) studied the output losses due to crises with a sample of 21 middle and high income countries over a 120 year period. The study also covered a large sample of emerging markets for a shorter period starting in 1973. They found a loss from the average crisis of almost 9% of GDP”
Assessing Measures of Financial Openness and Integration (2011, background): “(See Eichengreen, 2001.)”
Capital account liberalization, financial depth, and economic growth (2008, neutral): “ΔLLY ΔPRIVY ΔBANK (1) (2) (3) (4) (5) (6) ( 7 ) (8) (9)”
Financial Globalization: A Reappraisal (2009, background): “Eichengreen (2001) notes that, under these circumstances, capital inflows may be directed to sectors in which a country doesn’t have a comparative advantage.”
Growth Volatility and Financial Liberalization (2005, methodology): “Eichengreen (2001) has criticized the IMF capital account measure for being too coarse and therefore uninformative.3 The second measure of capital account openness is from Quinn (1997) and Quinn and Toyota (2003) and is also created from the annual volume published by the IMF’s AREAER.”
The determinants of liberalization of FDI policy in developing countries: a cross-sectional analysis, 1992-2001 (2004, background): “There have been a number of studies associating democracy with capital account liberalization (Eichengreen, 2001).”
Capital Market Liberalization and Development (2008, result): “45 Two surveys of the contrasting results in the literature are Eichengreen (2001); and Edison et al. (2002).”