Capital Account Liberalization, Free Long-Term Capital Flows, Financial Crises and Economic Development
AbstractThe 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 29 (2003)
Issue (Month): 2 (Spring)
Contact details of provider:
Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA
Phone: (201) 684-7346
Web page: http://www.ramapo.edu/eea/journal.html
More information through EDIRC
Capital Flow; Developing Countries; Development; Liberalization;
Other versions of this item:
- Ajit Singh, 2002. "Capital account liberalization, free long-term capital flows, financial crises and economic development," ESRC Centre for Business Research - Working Papers wp245, ESRC Centre for Business Research.
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- G2 - Financial Economics - - Financial Institutions and Services
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gordon H. HANSON, 2001. "Should Countries Promote Foreign Direct Investment?," G-24 Discussion Papers 9, United Nations Conference on Trade and Development.
- Charles WYPLOSZ, 2001.
"How Risky Is Financial Liberalization In The Developing Countries?,"
G-24 Discussion Papers
14, United Nations Conference on Trade and Development.
- Wyplosz, Charles, 2001. "How Risky is Financial Liberalization in the Developing Countries?," CEPR Discussion Papers 2724, C.E.P.R. Discussion Papers.
- Torsten SlÃ¸k & Michael Klein & Luca Antonio Ricci & Hali J. Edison, 2002. "Capital Account Liberalization and Economic Performance," IMF Working Papers 02/120, International Monetary Fund.
- Demetriades, Panicos O. & Luintel, Kul B., 2001.
"Financial restraints in the South Korean miracle,"
Journal of Development Economics,
Elsevier, vol. 64(2), pages 459-479, April.
- Manuel R. AGOSIN & Ricardo MAYER, 2000.
"Foreign Investment In Developing Countries, Does It Crowd In Domestic Investment?,"
UNCTAD Discussion Papers
146, United Nations Conference on Trade and Development.
- Manuel Agosin & Roberto Machado, 2005. "Foreign Investment in Developing Countries: Does it Crowd in Domestic Investment?," Oxford Development Studies, Taylor & Francis Journals, vol. 33(2), pages 149-162.
- Caprio, Gerard Jr. & Klingebiel, Daniela, 1996. "Bank insolvencies : cross-country experience," Policy Research Working Paper Series 1620, The World Bank.
- Classens, S. & Dooley, M.P. & Warner, A., 1995.
"Portfolio Capital Flows: Hot or Cold,"
501, Harvard - Institute for International Development.
- Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
- Ronald I. McKinnon & Huw Pill, 1999.
"Exchange Rate Regimes for Emerging Markets: Moral Hazard and International Overborrowing,"
99018, Stanford University, Department of Economics.
- McKinnon, Ronald I & Pill, Huw, 1999. "Exchange-Rate Regimes for Emerging Markets: Moral Hazard and International Overborrowing," Oxford Review of Economic Policy, Oxford University Press, vol. 15(3), pages 19-38, Autumn.
- Hali J. Edison & Michael W. Klein & Luca Antonio Ricci & Torsten Sløk, 2004.
"Capital Account Liberalization and Economic Performance: Survey and Synthesis,"
IMF Staff Papers,
Palgrave Macmillan, vol. 51(2), pages 2.
- Hali J. Edison & Michael W. Klein & Luca Ricci & Torsten Sloek, 2002. "Capital Account Liberalization and Economic Performance: Survey and Synthesis," NBER Working Papers 9100, National Bureau of Economic Research, Inc.
- Chari, Anusha & Henry, Peter B., 2002.
"Capital Account Liberalization: Allocative Efficiency or Animal Spirits?,"
1737, Stanford University, Graduate School of Business.
- Anusha Chari & Peter Blair Henry, 2002. "Capital Account Liberalization: Allocative Efficiency or Animal Spirits?," NBER Working Papers 8908, National Bureau of Economic Research, Inc.
- Philippe Martin & Helene Rey, 2002.
"Financial Globalization and Emerging Markets: With or Without Crash?,"
NBER Working Papers
9288, National Bureau of Economic Research, Inc.
- Martin, Philippe & Rey, Hélène, 2002. "Financial Globalization and Emerging Markets: With or Without Crash?," CEPR Discussion Papers 3378, C.E.P.R. Discussion Papers.
- Martin Feldstein, 2002. "Economic and Financial Crises in Emerging Market Economies: Overview of Prevention and Management," NBER Working Papers 8837, National Bureau of Economic Research, Inc.
- Graciela L. Kaminsky & Carmen M. Reinhart, 1996.
"The twin crises: the causes of banking and balance-of-payments problems,"
International Finance Discussion Papers
544, Board of Governors of the Federal Reserve System (U.S.).
- Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
- Reinhart, Carmen & Kaminsky, Graciela, 1999. "The twin crises: The causes of banking and balance of payments problems," MPRA Paper 14081, University Library of Munich, Germany.
- Williamson, John, 2002. "Proposals for Curbing the Boom-Bust Cycle in the Supply of Capital to Emerging Markets," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Glyn, A. & Hughes, A. & Lipietz, A. & Singh, A., 1988. "The Rise And Fall Of The Golden Age," Cambridge Working Papers in Economics 884, Faculty of Economics, University of Cambridge.
- Enrique G. Mendoza, 2001.
"Credit, Prices, and Crashes: Business Cycles with a Sudden Stop,"
NBER Working Papers
8338, National Bureau of Economic Research, Inc.
- Enrique G. Mendoza, 2002. "Credit, Prices, and Crashes: Business Cycles with a Sudden Stop," NBER Chapters, in: Preventing Currency Crises in Emerging Markets, pages 335-392 National Bureau of Economic Research, Inc.
- Ajit SINGH, 2002.
"Competition And Competition Policy In Emerging Markets: International And Developmental Dimensions,"
G-24 Discussion Papers
18, United Nations Conference on Trade and Development.
- Ajit Singh, 2002. "Competition and competition policy in emerging markets: international and developmental dimensions," ESRC Centre for Business Research - Working Papers wp246, ESRC Centre for Business Research.
- Gregory James & Michail Karoglou, 2010.
"Financial liberalization and stock market volatility: the case of Indonesia,"
Applied Financial Economics,
Taylor & Francis Journals, vol. 20(6), pages 477-486.
- Gregory James & Michail Karoglou, 2009. "Financial Liberalisation and Stock Market Volatility: The Case of Indonesia," Discussion Paper Series 2009_11, Department of Economics, Loughborough University, revised Sep 2009.
- Liberati, Paolo, 2007. "Trade openness, capital openness and government size," MPRA Paper 44371, University Library of Munich, Germany.
- Ben Gamra, Saoussen, 2009. "Does financial liberalization matter for emerging East Asian economies growth? Some new evidence," International Review of Economics & Finance, Elsevier, vol. 18(3), pages 392-403, June.
- Ajit Singh, 2005. "FDI, Globalisation and Economic Development - Towards Reforming National and International Rules of the Game," ESRC Centre for Business Research - Working Papers wp304, ESRC Centre for Business Research.
- Philip Arestis & Ajit Singh, 2010.
"Financial globalisation and crisis, institutional transformation and equity,"
Cambridge Journal of Economics,
Oxford University Press, vol. 34(2), pages 225-238, March.
- Arestis, Philip & Singh, Ajit, 2010. "Financial globalisation and crisis, institutional transformation and equity," MPRA Paper 39054, University Library of Munich, Germany.
- Arestis, P. & Singh, A., 2010. "Financial Globalisation and Crisis, Institutional Transformation and Equity," ESRC Centre for Business Research - Working Papers wp405, ESRC Centre for Business Research.
- 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, vol. 14(4), pages 220-233, 07.
- Ajit Singh & Ann Zammit, 2006. "Corporate Governance, Crony capitalism and Economic Crisis: Should the US Business Model replace the Asian Way of 'Doing Business'?," ESRC Centre for Business Research - Working Papers wp329, ESRC Centre for Business Research.
- Michail Karoglou & Panicos Demetriades & Siong Law, 2011. "One date, one break?," Empirical Economics, Springer, vol. 41(1), pages 7-24, August.
- 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 wp56, Political Economy Research Institute, University of Massachusetts at Amherst.
- 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, vol. 20(3), pages 391-410.
- Anita Giselle Doraisami, 2007. "Financial crisis in Malaysia: did FDI flows contribute to vulnerability?," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(7), pages 949-962.
- Moritz Cruz & Bernard Walters, 2008. "Is the accumulation of international reserves good for development?," Cambridge Journal of Economics, Oxford University Press, vol. 32(5), pages 665-681, September.
- Rolph van der Hoeven, 2010. "Labour Markets Trends, Financial Globalization and the current crisis in Developing Countries," Working Papers 99, United Nations, Department of Economics and Social Affairs.
- Panos Lambridis & Theodore Koukoulis, 2005. "The awakening of the red dragon. China fills the power vacuum in the Far East," Asia Europe Journal, Springer, vol. 3(4), pages 479-499, December.
- Valpy FitzGerald (QEH), . "Finance and Growth in Developing Countries: Sound Principles and Unreliable Evidence," QEH Working Papers qehwps153, Queen Elizabeth House, University of Oxford.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.