Capital Account Liberalization: Theory, Evidence, and SpeculationJournal of Economic Literature, 2007, vol. 45, issue 4, pages 887-935 Abstract: Research on the macroeconomic impact of capital account liberalization finds few, if any, robust effects of liberalization on real variables. In contrast to the prevailing wisdom, I argue that the textbook theory of liberalization holds up quite well to a critical reading of this literature. Most papers that find no effect of liberalization on real variables tell us nothing about the empirical validity of the theory because they do not really test it. This paper explains why it is that most studies do not really address the theory they set out to test. It also discusses what is necessary to test the theory and examines papers that have done so. Studies that actually test the theory show that liberalization has significant effects on the cost of capital, investment, and economic growth. Date: 2007 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:aea:jeclit:v:45:y:2007:i:4:p:887-935 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Economic Literature is edited by Roger H. Gordon and John McMillan More articles in Journal of Economic Literature from American Economic Association |
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