Preconditions for Liberalization of Capital Flows: A Review and Interpretation

Gothenburg University WP 1996:4

Posted: 10 Apr 1997

See all articles by Clas Wihlborg

Clas Wihlborg

Chapman University; University West

Kalman Dezseri

Institute for World Economics

Date Written: August 1996

Abstract

Argument for delaying capital account convertibility in the sequencing of a liberalization program are reviewed. Several of the common arguments for capital controls are questioned here on the grounds that they depend on assumptions about policy and market failures being exogenous. Relaxing capital controls may actually provide policymakers with incentives to address market failures directly. It will also be argued that a capital control policy requires the fine-tuning of the controls for desired objectives to be achieved.

JEL Classification: F32, F21, F39

Suggested Citation

Wihlborg, Clas and Dezseri, Kalman, Preconditions for Liberalization of Capital Flows: A Review and Interpretation (August 1996). Gothenburg University WP 1996:4, Available at SSRN: https://ssrn.com/abstract=4813

Clas Wihlborg (Contact Author)

Chapman University ( email )

333 N. Glassell
Orange, CA 92866
United States
+17147447630 (Phone)

University West ( email )

Trollhättan, 46186
Sweden

Kalman Dezseri

Institute for World Economics ( email )

P.O. Box 936
Budapest, H-1535
Hungary

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