Ready for capital account convertibility?

Purba Mukerji

Journal of International Money and Finance, 2009, vol. 28, issue 6, pages 1006-1021

Abstract: This paper investigates whether the impact of capital account convertibility on the long term volatility of economic growth depends on financial development. It estimates a system of three simultaneous equations: mean growth, volatility of growth and financial development. This allows for the study of both, the impact of capital account liberalization on volatility, as well as its direct impact on financial development. Results indicate that economies with low financial development fall prey to excess volatility arising from capital account openness, while capital account openness itself has a significant positive impact on financial development. The results are robust to alternative measures of financial development and volatility and to the removal of outliers.

Keywords: Volatility; Capital; account; convertibility; Financial; development (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6V9S ... 3c30d0d9d390b10f4759
Full text for ScienceDirect subscribers only

Related works:
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: http://EconPapers.repec.org/RePEc:eee:jimfin:v:28:y:2009:i:6:p:1006-1021

Access Statistics for this article

Journal of International Money and Finance is edited by J. R. Lothian

More articles in Journal of International Money and Finance from Elsevier
Series data maintained by Wendy Shamier ().