one of the most controversial aspects of financial markets is capital market liberalization of course not so liberalization under the rules of governmental severities. based on financial theories there are a number of reasons , that capital flows openness should lead to increases in economic growth. on the other hand most economists believe that the cost of openness outweigh the benefits , such...

We study the interrelationship between capital °ows, returns, dividend yields and world interest rates in 20 emerging markets. We estimate a vector autoregression with these variables to measure the degree to which lower interest rates contribute to increased capital °ows and shocks in °ows a®ect the cost of capital among other dynamic relations. We precede the VAR analysis by a detailed examin...

Research on the macroeconomic impact of capital account liberalization finds 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. Most papers that find no effect of liberalization on real variables tell us nothing about the empirical ...

We examine the impact of capital account policies on FDI inflows. Using an annual panel dataset of 83 developing and developed countries for 1984-2000, we find that capital account openness is positively but only very moderately associated with the amount of FDI inflows after controlling for other macroeconomic and institutional measures. To a large extent, other country characteristics seem to...

The surge in capital flows towards emerging market countries is one of the major developments in the world economy in the 1990s. In particular, short-term flows, in the form of portfolio investments or bank loans, have grown at an extremely rapid pace. At the same time, emerging markets have experienced an increasing number of financial crises, with dire consequences. It is increasingly argued ...

A Pragmatic Approach to Capital Account Liberalization Cross-country regressions suggest little connection from foreign capital inflows to more rapid economic growth for developing countries and emerging markets. This suggests that the lack of domestic savings is not the primary constraint on growth in these economies, as implicitly assumed in the benchmark neoclassical framework. We explore em...

The main objective of this paper is to review the theoretical issues and available empirical evidence on capital account liberalization. In addition to being of interest in its own right, capital account liberalizations is important to the debate on the New International Financial Architecture (NIFA) and to the post-Doha agenda at the World Trade Organization (WTO) in relation to foreign direct...

This paper evaluates the quantitative impact of capital liberalization on the taxation structure and welfare of the liberalizing countries when governments conduct fiscal policy optimally but without commitment (time-consistent policies). The transition from a regime of capital autarky to a regime of free mobility leads to a decrease in the long-term tax rate on capital of 13 percent and an inc...

The majority of OECD countries has experienced a reduction in the volatility of output during the past two and a half decades. This period has also been characterized by a process of capital accounts liberalization among these countries. We study an open economy business cycle model with financial market frictions and show that the international liberalization of capital markets can lead to low...

This paper evaluates the quantitative impact of capital liberalization on the taxation structure and welfare of the liberalizing countries when governments conduct fiscal policy optimally but without commitment (time-consistent policies). The transition from a regime of capital autarky to a regime of free mobility leads to a decrease in the long-term tax rate on capital of 13 percent and an inc...