Capital Account Openness and the Varieties of Growth Experience

Michael Klein

No 9500, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The effects of capital account openness on economic growth may vary across countries. Some countries may not have in place the constellation of institutions required to fully benefit from open capital accounts. Other countries may realize only small marginal improvements in the wake of capital account liberalization. This paper presents evidence of an inverted-U shaped relationship between the responsiveness of growth to capital account openness and income per capita. Middle-income countries benefit significantly from capital account openness. However, neither rich nor poor countries exhibit statistically significant positive effects. A similar inverted-U shaped relationship is found between the responsiveness of growth to capital account openness and various indicators of government quality.

JEL-codes: F32 F33 (search for similar items in EconPapers)
Date: 2003-02
New Economics Papers: this item is included in nep-cba, nep-dev and nep-ifn
Note: IFM
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Citations: View citations in EconPapers (40)

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