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CAPITAL ACCOUNT OPENNESS AND INFLATION: A PANEL DATA STUDY FOR THE 1990s

Author

Listed:
  • Abhijit Sen Gupta

    (University of Califonia, Santa Cruz)

Abstract

This paper aims to look at the relationship between capital account openness and inflation in the 1990s. It argues that widespread capital account liberalization during the early 1990s appears to have contributed to the world-wide disinflation observed during that decade. The paper attempts to provide a theoretical and empirical evidence for a strong negative link between capital account liberalization and disinflation. Capital account openness appears to discipline monetary authorities, or to help them convince the private sector that they will be more disciplined in the future.

Suggested Citation

  • Abhijit Sen Gupta, 2005. "CAPITAL ACCOUNT OPENNESS AND INFLATION: A PANEL DATA STUDY FOR THE 1990s," International Finance 0503002, EconWPA.
  • Handle: RePEc:wpa:wuwpif:0503002
    Note: Type of Document - pdf; pages: 26
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/if/papers/0503/0503002.pdf
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    References listed on IDEAS

    as
    1. Alberto Alesina & Vittorio Grilli & Gian Maria Milesi-Ferrett, 1993. "The Political Economy of Capital Controls," NBER Working Papers 4353, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Capital Account; Openness and Inflation;

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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