Policy Contagion: What Do We Learn from Financial Reforms?

Nan Li, Chris Papageorgiou (), Tong Xu and Tao Zha

No 28994, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use financial reforms as a case study to understand the temporal clustering of policy changes across countries, shedding light on the broader phenomenon of global policy contagion. We constructed a comprehensive database of domestic financial reforms spanning 90 countries from 1973 to 2014. Using this dataset, we estimate a semi-structural model that incorporates key factors identified in the literature. We find that (1) geopolitical influence and cross-country learning drove the global surge in reforms during the 1990s, and (2) reversals of financial reforms in developing countries after the global financial crisis reflected shifting beliefs about their growth effects.

JEL-codes: C11 C54 O11 O50 (search for similar items in EconPapers)
Date: 2021-07
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