If there are benefits to international risk sharing, consumption growth variability should decrease following the liberalization of the equity market. In addition, markets with open equity markets should display lower consumption growth variability than closed markets, everything else equal. However, the recent literature on financial liberalization suggests that volatile capital flows lead to ...

Stock market liberalizations lead private investment booms. In a sample of 11 developing countries that liberalized, 9 experience growth rates of private investment above their non-liberalization median in the first year after liberalizing. In the second and third years after liberalization this number is 10 of 11 and 8 of 11 respectively. The mean growth rate of private investment in the three...

How firms react to a given shock may depend on the degree to which rivals are present and on whether potentially viable entrants to that market exist. This paper attempts to measure these effects in an international context by examining the price behavior of the US in Brazil’s market when MERCOSUR and MFN trade liberalization take place. Using very detailed panel data on trade and tariff rates,...

This paper shows how the degree of credit-market imperfections affects the steady-state distributions of income and wealth, human capital investment, and the pattern of comparative advantage. The impact of trade liberalization on the accumulation of human capital depends on how it affects (1) the incentives to accumulate human capital, (2) the borrowing constraints facing human capital accumula...

In recent years, it has been encouraging to watch the developmental non-governmental organizations (NGOs) become more sophisticated in their thinking on the benefits of trade liberalization. NGOs such as Public Citizen that are against all forms of liberalization are now rare. Most NGOs including, for example, Oxfam, Christian Aid and Action Aid today agree that poor countries would benefit fro...