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Capital mobility, balance of payments constraints, and economic growth: an empirical dynamic analysis

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  • Sérgio F. Meyrelles-Filho

    (UFGO)

  • Frederico G. Jayme Jr

    (Cedeplar-UFMG)

Abstract

This paper analyses empirically the relationship between economic growth and the openness of the financial account of the balance of payments. It takes into consideration the balance of payments’ constrained growth, as well as the difficulties in the empirical literature in measuring capital mobility. Starting from the capital mobility index we estimate a panel across 80 countries, both developed and developing between 1997-2003. Results suggest that more capital mobility in developing countries affects growth negatively, whereas it possibly stimulates growth in developed countries.

Suggested Citation

  • Sérgio F. Meyrelles-Filho & Frederico G. Jayme Jr, 2010. "Capital mobility, balance of payments constraints, and economic growth: an empirical dynamic analysis," Textos para Discussão Cedeplar-UFMG td411, Cedeplar, Universidade Federal de Minas Gerais.
  • Handle: RePEc:cdp:texdis:td411
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    References listed on IDEAS

    as
    1. Montiel, Peter J, 1994. "Capital Mobility in Developing Countries: Some Measurement Issues and Empirical Estimates," World Bank Economic Review, World Bank Group, vol. 8(3), pages 311-350, September.
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    7. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
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    13. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1989. "The Revenues-Expenditures Nexus: Evidence from Local Government Data," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(2), pages 415-429, May.
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    Cited by:

    1. Mirdala, Rajmund & Svrčeková, Aneta & Semančíková, Jozefína, 2015. "On the Relationship between Financial Integration, Financial Liberalization and Macroeconomic Volatility," MPRA Paper 66143, University Library of Munich, Germany.

    More about this item

    Keywords

    Economic Growth; Capital Mobility; Dynamic Panel;

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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