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What are the Real Effects of Liberalizing International Capital Movements?

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Listed author(s):
  • Daniele Checchi

Abstract

Progress in financial integration calls for the abolition of capital controls, especially within the European community. Traditional analysis would then predict a better reallocation of productive capacity at the international level. A formal model is developed in order to show that it is impossible to draw unequivocal conclusions; moreover, when financial investors are allowed to allocate their wealth in public bonds, and governments pursue full employment targets, cases exist where the financial liberalization produces a reduction in capital accumulation in both the participating countries. Copyright Kluwer Academic Publishers 1992

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File URL: http://hdl.handle.net/10.1007/BF01886183
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Article provided by Springer in its journal Open Economies Review.

Volume (Year): 3 (1992)
Issue (Month): 1 (February)
Pages: 83-125

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Handle: RePEc:kap:openec:v:3:y:1992:i:1:p:83-125
DOI: 10.1007/BF01886183
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/international+economics/journal/11079/PS2

Keywords: open economy macroeconomics; exchange rates; international monetary arrangements;

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