Financial Liberalization in a Small Open Economy

Juergen von Hagen and Haiping Zhang ()

No 1771, CESifo Working Paper Series from CESifo

Abstract: We analyze the long-run and short-run implications of financial liberalization in a small open economy. Our main results are as follows. First, whether financial deregulation in one sector can improve production efficiency may depend on financial regulation in other sectors. Second, financial liberalization may have opposite welfare implications to domestic agents with different productivity in the long run. Third, although some domestic agents lose in the long run, they benefit from financial liberalization during the transitional process of deregulation. Finally, a gradual implementation helps achieve a smooth transition.

Keywords: financial frictions; financial liberalization; foreign borrowing; macroeconomic fluctuations; overshooting (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-dge, nep-fmk, nep-mac and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp1771.pdf (application/pdf)

Related works:
Journal Article: Financial Liberalization in a Small Open Economy (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1771

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().