EconPapers    
Economics at your fingertips  
 

The Aggregate and Distributional Effects of Financial Globalization: Evidence from Macro and Sectoral Data

Jonathan Ostry, Davide Furceri and Prakash Loungani

No 14001, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We take a fresh look at the aggregate and distributional effects of policies to liberalize international capital flows—financial globalization. Both country- and industry-level results suggest that such policies have led on average to limited output gains while contributing to significant increases in inequality. The country-level results are based on 228 capital account liberalization episodes spanning 149 advanced and developing economies from 1970 to the present. Difference-in-difference estimation using industry-level data for 23 advanced economies suggests that liberalization episodes reduce the share of labor income, particularly for industries with higher external financial dependence, higher natural propensity to use layoffs to adjust to idiosyncratic shocks, and higher elasticity of substitution between capital and labor.

Keywords: Globalization; Inequality; Capital account openness (search for similar items in EconPapers)
JEL-codes: F13 G32 O11 (search for similar items in EconPapers)
Date: 2019-09
New Economics Papers: this item is included in nep-ifn, nep-int and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (50)

Downloads: (external link)
https://cepr.org/publications/DP14001 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: The Aggregate and Distributional Effects of Financial Globalization: Evidence from Macro and Sectoral Data (2019) Downloads
Working Paper: The Aggregate and Distributional Effects of Financial Globalization: Evidence from Macro and Sectoral Data (2018) Downloads
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:cpr:ceprdp:14001

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP14001

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-24
Handle: RePEc:cpr:ceprdp:14001