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In Search of the Macroeconomic Effects of Capital Account Liberalization

Pub. Date: October 1, 1998
Full Text: Adobe Acrobat (PDF) [175 KB]

Empirical evidence on the macroeconomic benefits of capital account liberalization is scarce. This paper considers two popular explanations of this phenomenon:(i)that any benefits of capital account liberalization are offset by the greater volatility it brings; and (ii)that the benefits of capital account liberalization can only be realized in countries with sound institutions and policies. Neither of these explanations withstands empirical scrutiny.

 




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