Capital Account Liberalization and Economic Performance: Survey and Synthesis

54 Pages Posted: 15 Aug 2002 Last revised: 15 May 2021

See all articles by Hali J. Edison

Hali J. Edison

International Monetary Fund (IMF) - Research Department

Michael W. Klein

Tufts University - The Fletcher School of Law and Diplomacy; National Bureau of Economic Research (NBER)

Luca A. Ricci

International Monetary Fund (IMF) - Research Department

Torsten Sløk

Deutsche Bank, New York

Multiple version iconThere are 2 versions of this paper

Date Written: August 2002

Abstract

This paper reviews the literature on the effects of capital account liberalization and stock market liberalization on economic growth. The various empirical measures used to gauge the presence of controls on capital account transactions as well as indicators of stock market liberalization are discussed. We compare detailed measures of capital account controls that attempt to capture the intensity of enforcement with others that simply capture whether or not controls are present. Our review of the literature shows the contrasting results that have been obtained. These differences may reflect differences in country coverage, sample periods and indicators of liberalization. In order to reconcile these differences, we present new estimates of the effects on growth of capital account liberalization and stock market liberalization. We find some support for a positive effect of capital account liberalization on growth, especially for developing countries.

Suggested Citation

Edison, Hali J. and Klein, Michael W. and Ricci, Luca Antonio and Sløk, Torsten Mikkel, Capital Account Liberalization and Economic Performance: Survey and Synthesis (August 2002). NBER Working Paper No. w9100, Available at SSRN: https://ssrn.com/abstract=324043

Hali J. Edison

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6946 (Phone)
202-589-6946 (Fax)

Michael W. Klein (Contact Author)

Tufts University - The Fletcher School of Law and Diplomacy ( email )

Medford, MA 02155
United States
617-627-2718 (Phone)
617-627-3712 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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Luca Antonio Ricci

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6007 (Phone)
202-623-4072 (Fax)

Torsten Mikkel Sløk

Deutsche Bank, New York ( email )

60 Wall Street
Mail Stop: NYC60-1815
New York, NY 10005
United States

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