Capital Account Liberalization: Theory, Evidence, and Speculation

Research Papers from Stanford University, Graduate School of Business

Abstract: Writings on the macroeconomic impact of capital account liberalization find 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. The lion's share of papers that find no effect of liberalization on real variables tell us nothing about the empirical validity of the theory, because they do not really test it. This paper explains why it is that most studies do not really address the theory they set out to test. It also discusses what is necessary to test the theory and examines papers that have done so. Studies that actually test the theory show that liberalization has significant effects on the cost of capital, investment, and economic growth.

Date: 2006-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (90)

Downloads: (external link)
http://gsbapps.stanford.edu/researchpapers/library/RP1951.pdf
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to gsbapps.stanford.edu:443 (Bad file descriptor) (http://gsbapps.stanford.edu/researchpapers/library/RP1951.pdf [302 Found]--> https://gsbapps.stanford.edu/researchpapers/library/RP1951.pdf)

Related works:
Journal Article: Capital Account Liberalization: Theory, Evidence, and Speculation (2007)
Working Paper: Capital Account Liberalization: Theory, Evidence, and Speculation (2007)
Working Paper: Capital account liberalization: theory, evidence, and speculation (2006)
Working Paper: Capital Account Liberalization: Theory, Evidence, and Speculation (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:1951

Access Statistics for this paper

More papers in Research Papers from Stanford University, Graduate School of Business Contact information at EDIRC.
Bibliographic data for series maintained by ().