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

Abhijit Sen Gupta

International Finance from EconWPA

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.

Keywords: Capital Account; Openness and Inflation (search for similar items in EconPapers)
JEL-codes: F36 F41 E32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-mon
Date: 2005-03-10
Note: Type of Document - pdf; pages: 26
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpif:0503002

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