Does openness to international financial flows raise productivity growth?

Financial Openness and Productivity

Financial openness is often associated with higher rates of economic growth. We show that the impact of openness on factor productivity growth is more important than the effect on capital growth. This explains why the growth effects of liberalization appear to be largely permanent, not temporary. We attribute these permanent liberalization effects to the role financial openness plays in stock m...

International Capital Flows and Development: Financial Openness Matters

Does capital flow from rich to poor countries? We revisit the Lucas paradox and explore the role of capital account restrictions in shaping capital flows at various stages of economic development. We find that, when accounting for the degree of capital account openness, the prediction of the neoclassical theory is confirmed: less developed countries tend to experience net capital inflows and mo...

Comments on ‘ Productivity convergence and international openness ’ (

This Chapter studies the economic mechanism relating (i) growth and (ii) openness to trade. It investigates how openness to economic exchange influences total factor productivity (TFP) convergence across economies. This Chapter stands as the natural limit point of the sequence of findings reported in earlier Chapters. At the Conference, we had previously seen correlations and tabulations and di...

Does Precommitment Raise Growth ?

We develop an endogenous growth model driven by externalities from both private and public capital. The government levies distortionary taxation to finance a publicly provided consumption good and public infrastructure. Firms face adjustment costs. We compare the optimal and time-consistent policies in a linearquadratic approximation of the model. Although the time-consistent equilibrium is sub...

What would it take to raise Australian productivity growth?