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Financial Liberalization, Banking Crises and Growth: Assessing the Links

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Author Info
Bonfiglioli, Alessandra (IIES, Stockholm University.)
Mendicino, Caterina () (Dept. of Economics, Stockholm School of Economics)

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Abstract

This paper studies the effects of financial liberalization and banking crises on growth. It shows that financial liberalization spurs on average economic growth. Banking crises are harmful for growth, but to a lesser extent in countries with open financial systems and good institutions.

The positive effect of financial liberalization is robust to different definitions. While the removal of capital account restrictions is effective by increasing financial depth, equity market liberalization affects growth directly.

The empirical analysis is performed through GMM dynamic panel data estimations on a panel of 90 countries observed

in the period 1975-1999.

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Publisher Info
Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 567.

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Length: 28 pages
Date of creation: 21 Oct 2004
Date of revision:
Handle: RePEc:hhs:hastef:0567

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Related research
Keywords: Capital account liberalization; equity market liberalization; financial development; institutions; dynamic panel data;

Other versions of this item:

Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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References listed on IDEAS
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Full references

Cited by:
(explanations, 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.)

  1. Alessandra Bonfiglioli, 2006. "Financial Integration, Productivity and Capital Accumulation," Economics Working Papers 988, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
    Other versions:
  2. Bonfiglioli, Alessandra, 2005. "How Does Financial Liberalization affect Economic Growth?," Seminar Papers 736, Stockholm University, Institute for International Economic Studies. [Downloadable!]
  3. Saoussen Ben Gamra & Mickaël Clévenot, 2008. "Les effets ambigus de la libéralisation financière dans les pays en développement Croissance économique ou instabilité financière ?," Post-Print hal-00323334_v1, HAL. [Downloadable!]
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