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The Economic and Social Effects of Financial Liberalization: A Primer for Developing Countries

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  • Jayati Ghosh

Abstract

This paper considers the main elements of the standard pattern of financial liberalization that has become widely prevalent in developing countries. The theoretical arguments in favour of such liberalization are considered and critiqued, and the political economy of such measures is discussed. The problems for developing countries, with respect to financial fragility and the greater propensity to crisis, as well as the negative deflationary and developmental effects, are discussed. It is concluded that there is a strong case for developing countries to ensure that their own financial systems are adequately regulated with respect to their own specific requirements.

Suggested Citation

  • Jayati Ghosh, 2005. "The Economic and Social Effects of Financial Liberalization: A Primer for Developing Countries," Working Papers 4, United Nations, Department of Economics and Social Affairs.
    • Handle: RePEc:une:wpaper:4
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    File URL: http://www.un.org/esa/desa/papers/2005/wp4_2005.pdf
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    References listed on IDEAS

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    1. M Ayhan Kose & Eswar Prasad & Kenneth Rogoff & Shang-Jin Wei, 2009. "Financial Globalization: A Reappraisal," IMF Staff Papers, Palgrave Macmillan, vol. 56(1), pages 8-62, April.
    2. Mr. Ayhan Kose & Mr. Kenneth Rogoff & Mr. Eswar S Prasad & Shang-Jin Wei, 2003. "Effects of Financial Globalization on Developing Countries: Some Empirical Evidence," IMF Occasional Papers 2003/007, International Monetary Fund.
    3. Martin Feldstein, 2003. "Economic and Financial Crises in Emerging Market Economies," NBER Books, National Bureau of Economic Research, Inc, number feld03-1, March.
    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Capital Liberalization and Inequality
      by Dan Crawford in Angry Bear on 2014-04-15 11:35:00

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    Cited by:

    1. Dewan Mostafizur Rahman Author_Email: & Kohinur Akter, 2011. "Financial Liberalization And Interest Rate Convergence-An Empirical Study On Bangladesh," 2nd International Conference on Business and Economic Research (2nd ICBER 2011) Proceeding 2011-456, Conference Master Resources.
    2. Ahmed, Abdullahi D., 2013. "Effects of financial liberalization on financial market development and economic performance of the SSA region: An empirical assessment," Economic Modelling, Elsevier, vol. 30(C), pages 261-273.
    3. Mazumdar, Surajit, 2008. "Crony Capitalism: Caricature or Category?," MPRA Paper 19626, University Library of Munich, Germany.
    4. Ardliansyah, Rifqi, 2012. "Stock Market Integration and International Portfolio Diversification between U.S. and ASEAN Equity Markets," MPRA Paper 41958, University Library of Munich, Germany.
    5. Mehmet Okan Ta?ar & Sava? Çevik, 2014. "Financial Liberalization in the Developing Countries and Its Effect on Banking Systems and Banking Crises," Proceedings of International Academic Conferences 0702096, International Institute of Social and Economic Sciences.
    6. Ilias Alami, 2019. "Post-Crisis Capital Controls in Developing and Emerging Countries: Regaining Policy Space? A Historical Materialist Engagement," Review of Radical Political Economics, Union for Radical Political Economics, vol. 51(4), pages 629-649, December.
    7. Dehghan Nejad, Omid, 2011. "The review of financial repression policies and banking system in Iran," MPRA Paper 30924, University Library of Munich, Germany.
    8. Correa Romar & Rao D. Tripati, 2014. "A Heterodox Economics Critique of Financial Liberalization," Journal of Heterodox Economics, Sciendo, vol. 1(1), pages 79-99, June.

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    More about this item

    Keywords

    financial liberalization; development banking; financial fragility; financial crisis; deflation.;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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