Capital Account Liberalization

Capital Account Liberalization
Author :
Publisher :
Total Pages : 82
Release :
ISBN-10 : 0979037638
ISBN-13 : 9780979037634
Rating : 4/5 (38 Downloads)

Synopsis Capital Account Liberalization by : Peter Blair Henry

"Writings on the macroeconomic impact of capital account liberalization find few, if any, robust effects of liberalization on real variables. In contrast to the prevailing wisdom, I argue that the textbook theory of liberalization holds up quite well to a critical reading of this literature. The lion's share of papers that find no effect of liberalization on real variables tell us nothing about the empirical validity of the theory, because they do not really test it. This paper explains why it is that most studies do not really address the theory they set out to test. It also discusses what is necessary to test the theory and examines papers that have done so. Studies that actually test the theory show that liberalization has significant effects on the cost of capital, investment, and economic growth"--National Bureau of Economic Research web site.

Who Needs to Open the Capital Account

Who Needs to Open the Capital Account
Author :
Publisher : Peterson Institute
Total Pages : 147
Release :
ISBN-10 : 9780881326482
ISBN-13 : 0881326488
Rating : 4/5 (82 Downloads)

Synopsis Who Needs to Open the Capital Account by : Olivier Jeanne

Most countries emerged from the Second World War with capital accounts that were closed to the rest of the world. Since then, a process of capital account opening has occurred, with the result that all developed and many emerging-market countries now have capital accounts that are both de facto and de jure open, while many developing countries also have de facto openness. This study examines this in part by considering some of the first lessons from the current global financial crisis. This crisis may change the terms of the debate on capital account liberalization in a deeper and more lasting way than any of the crises of the past two decades because it may mark a reversal in the secular trend of financial liberalization at the core of the international financial system. The current crisis also raises new questions about the appropriate policy responses to boom-bust dynamics in domestic credit and in international credit flows. Intellectual consistency is needed between the domestic and international dimensions of financial regulation and the policies aimed at dealing with boom-bust dynamics in domestic and international credit.

Capital Account Liberalization and Inequality

Capital Account Liberalization and Inequality
Author :
Publisher : International Monetary Fund
Total Pages : 26
Release :
ISBN-10 : 9781513531403
ISBN-13 : 1513531409
Rating : 4/5 (03 Downloads)

Synopsis Capital Account Liberalization and Inequality by : Davide Furceri

This paper examines the distributional impact of capital account liberalization. Using panel data for 149 countries from 1970 to 2010, we find that, on average, capital account liberalization reforms increase inequality and reduce the labor share of income in the short and medium term. We also find that the level of financial development and the occurrence of crises play a key role in shaping the response of inequality to capital account liberalization reforms.

Capital Account Liberalization

Capital Account Liberalization
Author :
Publisher : International Monetary Fund
Total Pages : 74
Release :
ISBN-10 : 1557757771
ISBN-13 : 9781557757777
Rating : 4/5 (71 Downloads)

Synopsis Capital Account Liberalization by : Mr.Giovanni Dell'Ariccia

Capital account liberalization - orderly, properly sequence, and befitting the individual circumstances of countries- is an inevitable step for all countries wishing to realize the benefits of the globalized economy. This paper reviews the theories behind capital account liberalization and examines the dangers associated with free capital flows. The authors conclude that the dangers can be limited through a combination of sound macroeconomic and prudential policies.

Capital Ideas

Capital Ideas
Author :
Publisher : Princeton University Press
Total Pages : 332
Release :
ISBN-10 : 9781400833825
ISBN-13 : 1400833825
Rating : 4/5 (25 Downloads)

Synopsis Capital Ideas by : Jeffrey M. Chwieroth

The right of governments to employ capital controls has always been the official orthodoxy of the International Monetary Fund, and the organization's formal rules providing this right have not changed significantly since the IMF was founded in 1945. But informally, among the staff inside the IMF, these controls became heresy in the 1980s and 1990s, prompting critics to accuse the IMF of indiscriminately encouraging the liberalization of controls and precipitating a wave of financial crises in emerging markets in the late 1990s. In Capital Ideas, Jeffrey Chwieroth explores the inner workings of the IMF to understand how its staff's thinking about capital controls changed so radically. In doing so, he also provides an important case study of how international organizations work and evolve. Drawing on original survey and archival research, extensive interviews, and scholarship from economics, politics, and sociology, Chwieroth traces the evolution of the IMF's approach to capital controls from the 1940s through spring 2009 and the first stages of the subprime credit crisis. He shows that IMF staff vigorously debated the legitimacy of capital controls and that these internal debates eventually changed the organization's behavior--despite the lack of major rule changes. He also shows that the IMF exercised a significant amount of autonomy despite the influence of member states. Normative and behavioral changes in international organizations, Chwieroth concludes, are driven not just by new rules but also by the evolving makeup, beliefs, debates, and strategic agency of their staffs.

Capital Flows and Crises

Capital Flows and Crises
Author :
Publisher : MIT Press
Total Pages : 396
Release :
ISBN-10 : 0262550598
ISBN-13 : 9780262550598
Rating : 4/5 (98 Downloads)

Synopsis Capital Flows and Crises by : Barry J. Eichengreen

An analysis of the connections between capital flows and financial crises as well as between capital flows and economic growth.

Ruling Capital

Ruling Capital
Author :
Publisher : Cornell University Press
Total Pages : 286
Release :
ISBN-10 : 9780801454608
ISBN-13 : 0801454603
Rating : 4/5 (08 Downloads)

Synopsis Ruling Capital by : Kevin P. Gallagher

In Ruling Capital, Kevin P. Gallagher demonstrates how several emerging market and developing countries (EMDs) managed to reregulate cross-border financial flows in the wake of the global financial crisis, despite the political and economic difficulty of doing so at the national level. Gallagher also shows that some EMDs, particularly the BRICS coalition, were able to maintain or expand their sovereignty to regulate cross-border finance under global economic governance institutions. Gallagher combines econometric analysis with in-depth interviews with officials and interest groups in select emerging markets and policymakers at the International Monetary Fund, the World Trade Organization, and the G-20 to explain key characteristics of the global economy. Gallagher develops a theory of countervailing monetary power that shows how emerging markets can counter domestic and international opposition to the regulation of cross-border finance. Although many countries were able to exert countervailing monetary power in the wake of the crisis, such power was not sufficient to stem the magnitude of unstable financial flows that continue to plague the world economy. Drawing on this theory, Gallagher outlines the significant opportunities and obstacles to regulating cross-border finance in the twenty-first century.

Taming Capital Flows

Taming Capital Flows
Author :
Publisher : Springer
Total Pages : 300
Release :
ISBN-10 : 9781137427687
ISBN-13 : 113742768X
Rating : 4/5 (87 Downloads)

Synopsis Taming Capital Flows by : J. Stiglitz

This volume contains country experiences explained by policy makers and studies by leading experts on causes and consequences of capital flows as well as policies to control these flows. It addresses portfolio flow issues central to open economies, especially emerging markets.

Emerging Market Economies and Financial Globalization

Emerging Market Economies and Financial Globalization
Author :
Publisher : Anthem Press
Total Pages : 260
Release :
ISBN-10 : 9781783086757
ISBN-13 : 1783086750
Rating : 4/5 (57 Downloads)

Synopsis Emerging Market Economies and Financial Globalization by : Leonardo E. Stanley

In the past, foreign shocks arrived to national economies mainly through trade channels, and transmissions of such shocks took time to come into effect. However, after capital globalization, shocks spread to markets almost immediately. Despite the increasing macroeconomic dangers that the situation generated at emerging markets in the South, nobody at the North was ready to acknowledge the pro-cyclicality of the financial system and the inner weakness of “decontrolled” financial innovations because they were enjoying from the “great moderation.” Monetary policy was primarily centered on price stability objectives, without considering the mounting credit and asset price booms being generated by market liquidity and the problems generated by this glut. Mainstream economists, in turn, were not majorly attracted in integrating financial factors in their models. External pressures on emerging market economies (EMEs) were not eliminated after 2008, but even increased as international capital flows augmented in relevance thereafter. Initially economic authorities accurately responded to the challenge, but unconventional monetary policies in the US began to create important spillovers in EMEs. Furthermore, in contrast to a previous surge in liquidity, funds were now transmitted to EMEs throughout the bond market. The perspective of an increase in US interest rates by the FED is generating a reversal of expectations and a sudden flight to quality. Emerging countries’ currencies began to experience higher volatility levels, and depreciation movements against a newly strong US dollar are also increasingly observed. Consequently, there are increasing doubts that the “unexpected” favorable outcome observed in most EMEs at the aftermath of the Global Financial Crisis (GFC) would remain.

Sequencing Capital Account Liberalization

Sequencing Capital Account Liberalization
Author :
Publisher : International Monetary Fund
Total Pages : 116
Release :
ISBN-10 : 9781451857450
ISBN-13 : 1451857454
Rating : 4/5 (50 Downloads)

Synopsis Sequencing Capital Account Liberalization by : Claudia Echeverria

This paper examines issues in sequencing and pacing capital account liberalization and draws lessons from experience in four countries (Chile, Indonesia, Korea, and Thailand). The paper focuses on the interrelationship between capital account liberalization, domestic financial sector reforms, and the design of monetary and exchange rate policy. It concludes that capital account liberalization should be approached as an integrated part of comprehensive reform strategies and should be paced with the implementation of appropriate macroeconomic and exchange rate policies.