Convertibility and Volatility: The Pros and Cons of Liberalising the Capital Account

Graham Bird

Chapter 10 in International Finance and the Developing Economies, 2004, pp 169-180 from Palgrave Macmillan

Abstract: Abstract The late 1990s have seen an interesting juxtaposition between international financial crises in Latin America and East Asia involving a high degree of capital volatility, on the one hand, and the pursuit of capital account liberalisation by the International Monetary Fund on the other. A natural question is whether it makes sense to encourage capital account liberalisation at a time when capital movements seem either to have created or at least to have contributed to financial crises. The logic behind free capital convertibility in such circumstances is not immediately obvious; indeed intuition points in the opposite direction.

Keywords: Exchange Rate; Capital Flow; Capital Inflow; Private Capital; Capital Account (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-59984-0_10

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DOI: 10.1057/9780230599840_10

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