 Financial and Capital Account Liberalization in the Pacific Basin: Korea and Taiwan During the 1980'sMenzie Chinn and William Maloney International Economic Journal, 1998, vol. 12, issue 1, 53-74 Abstract: This paper presents an alternative method of testing for financial capital mobility in the absence of forward exchange markets. A model of domestic interest rate determination during liberalization is applied to Korean and Taiwanese data. A variety fo diagnostic and recursive tests are used to isolate structural breaks in the data. It is shown that Korean interest rates behave as if determined domestically until late 1988 or early 1989, while Taiwanese rates exhibit this behavior until early 1989. Thereafter, these economies' interest rates appear tightly linked to the Euro Yen rate. These results contrast with those obtained by Reisen and Yeches (1993) which indicated a single opening and closing for Korea, and no structural break for Taiwan. They also differ from those results of Jwa (1994) indicating two temporary openings for Korea. Greater integraton of these domestic markets with world financial markets suggests that it will be more difficult for these countries to stabilize their economies in the face of capital inflows and outflows. [F32,F34] Date: 1998 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:intecj:v:12:y:1998:i:1:p:53-74 Ordering information: This journal article can be ordered from DOI: 10.1080/10168739800000004 Access Statistics for this article International Economic Journal is currently edited by Jaymin Lee Editor More articles in International Economic Journal from Taylor & Francis Journals |
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