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 liberalisation in developing countries(DCs) and finds it unconvincing. Indeed, analysis and evidence presented here point to a compelling case against it. The second part considers the liberalisation of only the long-term capital account, particularly FDI - a form of in-flow favoured by most economists. This paper, however, argues that even FDI, if unregulated, may do more harm than good. It is suggested that DCs should, therefore, resist the new advanced country proposals for a multilateral agreement on FDI.
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Bibliographic InfoPaper provided by ESRC Centre for Business Research in its series ESRC Centre for Business Research - Working Papers with number wp245.
Date of creation: Dec 2002
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Capital account liberalisation; FDI;
Other versions of this item:
- Ajit Singh, 2003. "Capital Account Liberalization, Free Long-Term Capital Flows, Financial Crises and Economic Development," Eastern Economic Journal, Eastern Economic Association, vol. 29(2), pages 191-216, Spring.
- F2 - International Economics - - International Factor Movements and International Business
- F3 - International Economics - - International Finance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-12-09 (All new papers)
- NEP-IFN-2002-12-09 (International Finance)
- NEP-PKE-2002-12-09 (Post Keynesian Economics)
- NEP-RMG-2002-12-09 (Risk Management)
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