International Finance and Growth in Developing Countries: What Have We Learned&quest
Maurice Obstfeld
IMF Staff Papers, 2009, vol. 56, issue 1, 63-111
Abstract:
Despite an abundance of cross-sectional, panel, and event studies, there is strikingly little convincing documentation of direct positive impacts of financial opening on the economic welfare levels or growth rates of developing countries. The econometric difficulties are similar to those that bedevil the literature on trade openness and growth though, if anything, they are more severe in the context of international finance. There is also little systematic evidence that financial opening raises welfare indirectly by promoting collateral reforms of economic institutions or policies. At the same time, opening the financial account does appear to raise the frequency and severity of economic crises. Nonetheless, developing countries continue to move in the direction of further financial openness. A plausible explanation is that financial development is a concomitant of successful economic growth, and a growing financial sector in an economy open to trade cannot long be insulated from cross-border financial flows. This survey discusses the policy framework in which financial globalization is most likely to prove beneficial for developing countries. The reforms developing countries need to carry out to make their economies safe for international asset trade are the same reforms they need to carry out to curtail the power of entrenched economic interests and liberate the economy's productive potential. IMF Staff Papers (2009) 56, 63–111. doi:10.1057/imfsp.2008.32
Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (162)
Downloads: (external link)
http://www.palgrave-journals.com/imfsp/journal/v56/n1/pdf/imfsp200832a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/imfsp/journal/v56/n1/full/imfsp200832a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.
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: https://EconPapers.repec.org/RePEc:pal:imfstp:v:56:y:2009:i:1:p:63-111
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2
Access Statistics for this article
More articles in IMF Staff Papers from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().