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

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 libera...

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Bibliographic Details
Main Author:	Eichengreen, Barry
Format:	Journal Article
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTING ACCOUNTING STANDARDS ASSET PRICES ASYMMETRIC INFORMATION BALANCE OF PAYMENTS BANK INTERMEDIATION BANK REGULATION BANKING CRISES BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BLACK MARKET BOND BOND MARKETS BONDS BUDGET DEFICIT CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL ACCOUNT RESTRICTIONS CAPITAL ACCOUNT TRANSACTIONS CAPITAL ACCOUNTS CAPITAL CONSTRAINTS CAPITAL CONTROL CAPITAL CONTROLS CAPITAL FLOWS CAPITAL INFLOW CAPITAL INFLOWS CAPITAL MARKET CAPITAL MARKET LIBERALIZATION CAPITAL MOBILITY CAPITAL MOVEMENTS CAPITAL OUTFLOWS CAPITAL TRANSACTIONS CAPITAL TRANSFERS CENTRAL BANK CENTRAL BANK INDEPENDENCE CENTRAL BANKS CONTRACT ENFORCEMENT CORPORATE GOVERNANCE COUNTRY RISK CREDITOR CREDITOR RIGHTS CROSS-COUNTRY STUDIES CURRENCY CURRENCY CRISES CURRENCY CRISIS CURRENCY RISK CURRENT ACCOUNT CURRENT ACCOUNT TRANSACTIONS DEBT DEBT SECURITIES DEBT SERVICING DEBT SERVICING COSTS DEFAULT RISK DEPOSIT DEVELOPING COUNTRIES DISTORTION DISTORTIONS DOMESTIC CREDIT DOMESTIC EQUITY DOMESTIC FINANCIAL LIBERALIZATION DOMESTIC FINANCIAL MARKETS DOMESTIC MARKETS DOMESTIC SECURITIES DUMMY VARIABLE DUMMY VARIABLES ECONOMIC DEVELOPMENT EMERGING ECONOMIES EMERGING MARKET EMERGING MARKETS EQUITY MARKETS EXCHANGE ARRANGEMENTS EXCHANGE CONTROLS EXCHANGE RATE EXCHANGE RATES EXCHANGE RESTRICTIONS EXPENDITURE EXPORTERS EXTERNAL DEBT FEDERAL RESERVE FEDERAL RESERVE BANK FEDERAL RESERVE SYSTEM FINANCIAL CRISES FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL FRAGILITY FINANCIAL INSTABILITY FINANCIAL INSTITUTIONS FINANCIAL LIBERALIZATION FINANCIAL MARKET FINANCIAL OPENNESS FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL TRANSACTIONS FISCAL DEFICITS FISCAL DISCIPLINE FISCAL POLICIES FISCAL POLICY FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATES FOREIGN CAPITAL FOREIGN DEBT FOREIGN DIRECT INVESTMENT FOREIGN EQUITIES FOREIGN EXCHANGE FOREIGN FUNDS FOREIGN INVESTMENT FOREIGN INVESTORS FORWARD RATES FREE CAPITAL FUTURES FUTURES MARKET GLOBAL ECONOMY GLOBALIZATION GOVERNMENT GUARANTEES GOVERNMENT REVENUE GOVERNMENT SPENDING HOLDING HOLDINGS IMPORT IMPORTS INFLATION INFORMATION ASYMMETRIES INSTITUTIONAL DEVELOPMENT INSTRUMENT INSURANCE INTEREST DIFFERENTIALS INTEREST EARNINGS INTEREST RATE INTEREST RATE PARITY INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL INVESTMENT INTERNATIONAL MARKETS INTERNATIONAL PORTFOLIO INTERNATIONAL TRADE INVESTMENT DECISIONS INVESTOR CONFIDENCE LENDERS LIQUIDITY MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILIZATION MARGINAL PRODUCT MARKET CAPITALIZATIONS MARKET DISCIPLINE MARKET ECONOMIES MARKET INTEGRATION MARKET RETURNS MATURITY MATURITY STRUCTURE MONETARY FUND MONETARY POLICY MORAL HAZARD OFFSHORE BANK OFFSHORE MARKET OFFSHORE MARKETS OPEN COUNTRIES OPEN ECONOMY OPPORTUNITY COST POLITICAL ECONOMY POLITICAL RISK PORTFOLIO PORTFOLIO CAPITAL PORTFOLIO CAPITAL INFLOWS PORTFOLIO DIVERSIFICATION PORTFOLIO FLOWS PORTFOLIO INVESTMENT PRUDENTIAL REGULATION PRUDENTIAL SUPERVISION PUBLIC FINANCE PUBLIC FINANCES PUBLIC SPENDING RATE OF RETURN REAL INTEREST REAL INTEREST RATES REGIONAL DUMMY RESERVE RESERVE REQUIREMENTS RETURN RISK EXPOSURE RISK EXPOSURES SAFETY NET SECURITIES SECURITIES MARKETS SHORT-TERM CAPITAL SHORT-TERM DEBT SHORT-TERM INTEREST RATES STOCK EXCHANGE STOCK EXCHANGES STOCK MARKET STOCK MARKET DEVELOPMENT STOCK MARKETS STOCKS SURRENDER REQUIREMENTS TAX TAX RATES TRADING TRANSITION ECONOMIES TURNOVER UNDERLYING ASSETS WARRANTS WORLD MARKET INTEGRATION
Online Access:	http://documents.worldbank.org/curated/en/2001/09/17737458/capital-account-liberalization-cross-country-studies-tell http://hdl.handle.net/10986/17435

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Summary:	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.

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

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