A Pragmatic Approach to Capital Account Liberalization

Eswar Prasad and Raghuram Rajan

No 14051, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Cross-country regressions suggest little connection from foreign capital inflows to more rapid economic growth for developing countries and emerging markets. This suggests that the lack of domestic savings is not the primary constraint on growth in these economies, as implicitly assumed in the benchmark neoclassical framework. We explore emerging new theories on both the costs and benefits of capital account liberalization, and suggest how one might adopt a pragmatic approach to the process.

JEL-codes: F21 F31 F36 F43 (search for similar items in EconPapers)
Date: 2008-06
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-int and nep-opm
Note: CF IFM
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Citations: View citations in EconPapers (161)

Published as Eswar S. Prasad & Raghuram G. Rajan, 2008. "A Pragmatic Approach to Capital Account Liberalization," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 149-72, Summer.

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Journal Article: A Pragmatic Approach to Capital Account Liberalization (2008)
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