Rethinking the Effects of Financial Liberalization

Jaume Ventura and Fernando Broner

No 509, Working Papers from Barcelona School of Economics

Abstract: During the last few decades, many emerging markets lifted restrictions on cross-border …financial transactions. In this paper, we present a simple model that can account for the observed effects of …financial globalization. The model emphasizes the role of imperfect enforcement of domestic debts and the interactions between domestic and foreign debts. Financial globalization can lead to a variety of outcomes: (i) domestic capital ‡flight and ambiguous effects on net capital ‡flows, investment, and growth; (ii) capital in‡flows and higher investment and growth; or (iii) volatile capital ‡flows and unstable domestic …financial markets. The model shows how the effects of …financial globalization depend on the level of development, productivity, domestic savings, and the quality of institutions.

Keywords: economic growth; sovereign risk; Capital flows; enforcement; Financial liberalization (search for similar items in EconPapers)
JEL-codes: F34 F36 F43 G15 O19 O43 (search for similar items in EconPapers)
Date: 2015-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
https://bw.bse.eu/wp-content/uploads/2015/09/509-file.pdf (application/pdf)

Related works:
Working Paper: Rethinking the Effects of Financial Liberalization (2010)
Working Paper: Rethinking the Effects of Financial Liberalization (2010)
Working Paper: Rethinking the effects of financial liberalization (2008)
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:bge:wpaper:509

Access Statistics for this paper

More papers in Working Papers from Barcelona School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Bruno Guallar ().