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Capital account liberalization, free long-term capital flows, financial crises and economic development

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  • Ajit Singh

Abstract

The 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.

Suggested Citation

  • Ajit Singh, 2002. "Capital account liberalization, free long-term capital flows, financial crises and economic development," Working Papers wp245, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp245
    Note: PRO-2
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    References listed on IDEAS

    as
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    12. 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.
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    More about this item

    Keywords

    Capital account liberalisation; FDI;

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F3 - International Economics - - International Finance

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