Capital Account Liberalization: Theoretical and Practical Aspects

Michael Mussa, Giovanni Dell'ariccia, Barry Eichengreen and Enrica Detragiache ()

No 1998/016, IMF Occasional Papers from International Monetary Fund

Abstract: Capital account liberalization - orderly, properly sequence, and befitting the individual circumstances of countries- is an inevitable step for all countries wishing to realize the benefits of the globalized economy. This paper reviews the theories behind capital account liberalization and examines the dangers associated with free capital flows. The authors conclude that the dangers can be limited through a combination of sound macroeconomic and prudential policies.

Keywords: OP; liberalization; sequenced capital account liberalization; adverse selection; market; bank; sequence capital account liberalization; short-term debt; squeeze margin; financial market distortion; Capital account liberalization; Capital flows; Capital account; Capital controls; Commercial banks; Global; East Asia; Europe (search for similar items in EconPapers)
Pages: 72
Date: 1998-09-30
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Citations: View citations in EconPapers (15)

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