Capital Mobility in Developing Countries: M386Some Empirical Tests

International Monetary Fund

No 1990/117, IMF Working Papers from International Monetary Fund

Abstract: The degree of capital mobility in developing economies is seldom estimated, even though it is widely recognized to be an important element in determining the effects of stabilization policies. Instead, an economy is assumed to be open or closed mainly on grounds of analytical convenience. This paper develops a simple approach to modelling and measuring the degree of financial openness which is applicable to developing economies. Empirical estimation using data from a large number of developing countries suggests that the effective degree of capital mobility in such economies may be higher than is commonly assumed.

Keywords: WP; capital mobility; interest rate variable; market-clearing interest rate i.; mobility index; capital-mobility parameter; interest rate data; Capital flows; Capital account; Monetary base; Capital controls; Interest rate parity; Central America; North America (search for similar items in EconPapers)
Pages: 16
Date: 1990-12-01
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Citations: View citations in EconPapers (19)

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