Financial Globalization: A Reappraisal

Kenneth Rogoff, Shang-Jin Wei, Eswar Prasad and Ayhan Kose

No 5842, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The literature on the benefits and costs of financial globalization for developing countries has exploded in recent years, but along many disparate channels with a variety of apparently conflicting results. We attempt to provide a unified conceptual framework for organizing this vast and growing literature. This framework allows us to provide a fresh synthetic perspective on the macroeconomic effects of financial globalization, both in terms of growth and volatility. Overall, our critical reading of the recent empirical literature is that it lends some qualified support to the view that developing countries can benefit from financial globalization, but with many nuances. On the other hand, there is little systematic evidence to support widely-cited claims that financial globalization by itself leads to deeper and more costly developing country growth crises.

Keywords: Capital account liberalization; Financial integration; Growth and volatility; Financial crises; Developing countries (search for similar items in EconPapers)
JEL-codes: F02 F21 F36 F4 (search for similar items in EconPapers)
Date: 2006-09
New Economics Papers: this item is included in nep-cba, nep-dev and nep-ifn
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Citations: View citations in EconPapers (469)

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Related works:
Journal Article: Financial Globalization: A Reappraisal (2009)
Journal Article: Financial Globalization: A Reappraisal (2009)
Working Paper: Financial Globalization: A Reappraisal (2006)
Working Paper: Financial Globalization: A Reappraisal (2006)
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