A Pragmatic Approach to Capital Account Liberalization

Eswar Prasad () and Raghuram G. Rajan

No 3475, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: Cross-country regressions suggest little connection from foreign capital inflows to more rapid economic growth for developing countries and emerging markets. This suggests that the lack of domestic savings is not the primary constraint on growth in these economies, as implicitly assumed in the benchmark neoclassical framework. We explore emerging new theories on both the costs and benefits of capital account liberalization, and suggest how one might adopt a pragmatic approach to the process.

Keywords: collateral benefits; capital controls; capital account liberalization; thresholds (search for similar items in EconPapers)
JEL-codes: F2 F3 F4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int and nep-opm
Date: Written 2008-04
View list of references

Published in: Journal of Economic Perspectives, 2008, 22 (3), 149-172

Downloads: (external link)
http://ftp.iza.org/dp3475.pdf (application/pdf)

Related works:
Working Paper: A Pragmatic Approach to Capital Account Liberalization (2008)
Journal Article: A Pragmatic Approach to Capital Account Liberalization (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute for the Study of Labor (IZA)
Address: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Contact information at EDIRC.
Series data maintained by Mark Fallak ().