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Capital Account Liberalization, Free Long-Term Capital Flows, Financial Crises and Economic Development

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  • Ajit Singh

    ()
    (Queens' College, University of Cambridge)

Abstract

The first part of this paper examines the theoretical and empirical case for full capital account liberalization in developing countries (DCs) and finds it unconvincing. Indeed, analysis and evidence presented here point to a strong case against it. The second part considers the liberalization of only the long-term capital account, particularly FDI--a form of inflow favored by most economists. This paper argues that a multilateral agreement on investment, which denies countries the discretion to regulate FDI, will not be in the interests of DCs.

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File URL: http://college.holycross.edu/RePEc/eej/Archive/Volume29/V29N2P191_216.pdf
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Bibliographic Info

Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

Volume (Year): 29 (2003)
Issue (Month): 2 (Spring)
Pages: 191-216

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Handle: RePEc:eej:eeconj:v:29:y:2003:i:2:p:191-216

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Keywords: Capital Flow; Developing Countries; Development; Liberalization;

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References

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Citations

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Cited by:
  1. Qazi Hye & Wee-Yeap Lau & Marie-Aimée Tourres, 2014. "Does economic liberalization promote economic growth in Pakistan? An empirical analysis," Quality & Quantity: International Journal of Methodology, Springer, Springer, vol. 48(4), pages 2097-2119, July.
  2. Gregory James & Michail Karoglou, 2009. "Financial Liberalisation and Stock Market Volatility: The Case of Indonesia," Discussion Paper Series, Department of Economics, Loughborough University 2009_11, Department of Economics, Loughborough University, revised Sep 2009.
  3. Ben Gamra, Saoussen, 2009. "Does financial liberalization matter for emerging East Asian economies growth? Some new evidence," International Review of Economics & Finance, Elsevier, Elsevier, vol. 18(3), pages 392-403, June.
  4. Rolph van der Hoeven, 2010. "Labour Markets Trends, Financial Globalization and the current crisis in Developing Countries," Working Papers, United Nations, Department of Economics and Social Affairs 99, United Nations, Department of Economics and Social Affairs.
  5. Liberati, Paolo, 2007. "Trade openness, capital openness and government size," MPRA Paper 44371, University Library of Munich, Germany.
  6. Chun-Da Chen & Alex YiHou Huang & Chih-Chun Chen, 2011. "The Effects of Abolishing a Foreign Institutional Investment Quota in Taiwan," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 47(2), pages 74-98, March.
  7. Moritz Cruz & Bernard Walters, 2008. "Is the accumulation of international reserves good for development?," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 32(5), pages 665-681, September.
  8. Ajit Singh, 2002. "Competition and competition policy in emerging markets: international and developmental dimensions," ESRC Centre for Business Research - Working Papers, ESRC Centre for Business Research wp246, ESRC Centre for Business Research.
  9. Anita Giselle Doraisami, 2007. "Financial crisis in Malaysia: did FDI flows contribute to vulnerability?," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 19(7), pages 949-962.
  10. Ajit Singh & Ann Zammit, 2006. "Corporate Governance, Crony Capitalism and Economic Crises: should the US business model replace the Asian way of "doing business"?," Corporate Governance: An International Review, Wiley Blackwell, Wiley Blackwell, vol. 14(4), pages 220-233, 07.
  11. Ajit Singh, 2005. "FDI, Globalisation and Economic Development - Towards Reforming National and International Rules of the Game," ESRC Centre for Business Research - Working Papers, ESRC Centre for Business Research wp304, ESRC Centre for Business Research.
  12. Panos Lambridis & Theodore Koukoulis, 2005. "The awakening of the red dragon. China fills the power vacuum in the Far East," Asia Europe Journal, Springer, Springer, vol. 3(4), pages 479-499, December.
  13. Arestis, P. & Singh, A., 2010. "Financial Globalisation and Crisis, Institutional Transformation and Equity," ESRC Centre for Business Research - Working Papers, ESRC Centre for Business Research wp405, ESRC Centre for Business Research.
  14. Valpy FitzGerald (QEH), . "Finance and Growth in Developing Countries: Sound Principles and Unreliable Evidence," QEH Working Papers, Queen Elizabeth House, University of Oxford qehwps153, Queen Elizabeth House, University of Oxford.
  15. K.S. Jomo & Ilene Grabel & Gerald Epstein, 2003. "Capital Management Techniques In Developing Countries: An Assessment of Experiences From the 1990s and Lessons for the Future," Working Papers, Political Economy Research Institute, University of Massachusetts at Amherst wp56, Political Economy Research Institute, University of Massachusetts at Amherst.
  16. Michail Karoglou & Panicos Demetriades & Siong Law, 2011. "One date, one break?," Empirical Economics, Springer, Springer, vol. 41(1), pages 7-24, August.
  17. Michelle Baddeley, 2006. "Convergence or Divergence? The Impacts of Globalisation on Growth and Inequality in Less Developed Countries," International Review of Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 20(3), pages 391-410.

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