Short-Run Pain, Long-Run Gain : The Effects of Financial Liberalization
The authors examine the short- and long-run effects of financial liberalization on capital markets. To do so, they construct a new comprehensive chronology of financial liberalization in 28 developed and emerging economies since 1973. The authors a...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2002/10/2040838/short-run-pain-long-run-gain-effects-financial-liberalization http://hdl.handle.net/10986/19217 |
| Summary: | The authors examine the short- and
long-run effects of financial liberalization on capital
markets. To do so, they construct a new comprehensive
chronology of financial liberalization in 28 developed and
emerging economies since 1973. The authors also construct an
algorithm to identify booms and busts in stock market
prices. The results indicate that financial liberalization
is followed by more pronounced boom-bust cycles in the short
run. But financial liberalization leads to more stable
markets in the long run. Finally, the authors analyze the
sequencing of liberalization and institutional reforms to
understand the contrasting short- and long-run effects of liberalization. |
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