Economic integration and government revenue from financial repression

Economic Systems, 2013, vol. 37, issue 2, 271-283

Abstract: We study a relationship between economic openness via financial and trade integration and government revenue from financial repression. An implicit budgetary saving, the financial repression revenue, as measured by the stock of government domestic debt multiplied by the difference between effective foreign and domestic interest rate, has declined significantly from the 1980s into the 2000s across the upper-income, the middle-income, and the low-income developing countries. While we find that both the financial and trade openness have a negative association with the financial repression revenue in the panel of countries, the effect of financial openness is stronger and the empirical correlations depend on the quality of governmental and budgetary management.

Keywords: Financial repression; Globalization; Government debt (search for similar items in EconPapers)
JEL-codes: F36 H63 P11 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:37:y:2013:i:2:p:271-283

DOI: 10.1016/j.ecosys.2012.10.003

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