This paper tries to analyze effects of trade and financial liberalizations on the Iran’s government size during both long-run and short- run. Accordingly, a specification of the auto regression with distributed lag (ARDL) has been used for investigating the long run relationships between variables, and a vector correction model (VECM) has examined dynamically the short-run relationships betwe...

I propose asymmetric trade liberalizations as a new potential determinant of current account dynamics. focus on South Korea, which experienced rise and fall its in the period from 2010 to 2018, when it signed preferential agreements (PTAs) with main trading partners. First, develop model where depends timing present future relative changes costs. Second, provide empirical evidence supporting ke...

Stock market liberalizations provide a natural experiment to test for the causal relation between financial development and economic growth. We test this relation by investigating whether liberalizations facilitate growth through the particular mechanism of reducing capital market imperfections that drive a wedge between the external and internal cost of capital to firms. Using panel data on a ...

We study how …nancial frictions and the saving rate shape the long-run e¤ects of trade liberalization on income, consumption and the distribution of wealth in …nancially underdeveloped economies. In our model, regardless of whether the capital account is open or not, trade liberalization reduces the share of wealth in the hands of entrepreneurs and may well reduce steady state consumption and i...

This paper provides a unified theoretical framework to analyze the macroeconomic consequences of capital account liberalizations and capital controls, like capital inflow taxes. It identifies two pecuniary externalities that lead to inefficient outcomes in terms of welfare and to financial instability. The first externality undermines the “terms of trade hedge” while the second leads to excessi...

Article history: Received 29 August 2012 Received in revised form 21 May 2013 Accepted 6 August 2013 Available online 15 August 2013 We test the impact of idiosyncratic risk on stock returns for emerging markets that experience financial market liberalizations. Idiosyncratic risk is positively associated with returns prior to financial market liberalization, but liberalization diminishes this e...

All industrialized nations relied on capital account controls for significant periods of their economic development and relaxations of capital account restrictions thought to be an integral aspect of economic development. Economists long advocated the removal of capital controls as a stabilizing factor of the development process to improve efficiency and return economies from distorted factor p...

We study the resource allocation decisions of U.S. multinational corporations (MNCs). We examine how established MNCs grow across countries and how firm-specific resources and host-country financial-market development influence MNC growth. We find no evidence of within-firm tradeoffs to growth in MNCs with greater measures of organizational capital, knowledge resources and access to financing. ...