Keywords: capital flows, financial liberalisation, and growth 1 introduction globalisation, liberalisation and integration are the buzzwords in policy and strategy in the last three decades as, financial linkages of developing economies with the global economy have significantly increased large parts of the developing. Among economists, support for the free movement of money is an article of faith like free trade, the argument goes, the free flow of capital across borders can increase economic efficiency savings will flow to the most productive investment opportunities, regardless of their location greater competition will. The impossible trinity is a concept in international economics which states that it is impossible to have all three of the following at the same time: a fixed foreign exchange rate free capital movement (absence of capital controls) an independent monetary policy it is both a hypothesis based on the uncovered interest rate. As opposed to the closed capital markets case, simple restrictions on preferences are no longer sufficient to eliminate the indeterminacy intuitively, under perfect capital mobility agents are able to smooth consumption completely this induces an economy with open capital markets to behave like a closed economy with. Journal of political economy, 89 (1981), pp 769-797 caprio and howard, 1984 ga caprio jr, dh howarddomestic saving, current accounts, and international capital mobility international finance discussion papers no 244, board of governors of the federal reserve system (1984) cumby and mishkin, 1985. The purpose of this paper is to analyze the effects of economic openness and increasing capital mobility on the economic growth the author argues that anti- globalization views are based on incomplete evidence and tend to ignore important historical evidence in the pare the author discusses the relationship between. Department of economics, princeton university library of congress cataloging in publication data kenen, peter b capital mobility and financial integration ( princeton studies in international finance no 39 issn 0081-8070) includes bibliographical references 1 capital movements 2 international finance 3 balance.
The conventional wisdom about the domestic political effects of economic internationalization in recent decades is overdrawn and too simple increasing exposure to trade and capital mobility has not led all countries to pursue the same types of economic policies the political power of the left and the. Capital mobility and regulation 147 the enthusiasm for capital account liberalization was dampened by the next bout of capital flow volatility in southeast asia, which john observed from a good vantage point as chief economist for the south asia region at the world bank in 1996–99 he examined the lessons. Artigos rethinking the economics of capital mobility and capital controls thomas i palley independent economist working in washington dc he can be reached at [email protected] abstract this paper reexamines the issue of international financial capital mobility, which is today's economic orthodoxy.
The article is divided into three sections the first sets out, and critiques, the prevailing orthodoxy regarding capital mobility and economic policy autonomy, namely, the 'strong' version of the capital mobility hypothesis (cmh) the second establishes the ideational and institutional context within which financial credibility is. Prerequisite for capital account liberalization rajan and zingales (2003) and do and levchenko (2007) find that trade and international capital movement induce financial development indeed, the quality of financial institution has long been recognized to be critical to the economic prosperity mckinnon (1973, 1993), for. Scholars examining the cross-national mobility of capital have followed two distinct paths economists tend to focus on the determinants and economic effects of cross-country capital movements while political scientists largely concentrate on the political impact of capital mobility this study fills an important gap in the.
Outline part i: assessing international capital mobility empirically — the feldstein-horioka puzzle (s&w-j, ch 41) — the lucas paradox (lucas, 1990) — resolving the lucas paradox (caselli and feyrer, 2005) part ii: open economy solow model - capital mobility — the basic model — empirical issues 2. In this paper i use a new cross-country data set to investigate the effects of capital mobility on economic growth the new indicator of capital mobility used in this analysis is superior to previously used indexes in two respects: (1) it allows for intermediate situations, where a country's capital account is semi-open and (2) it.
Crowding-out in the us economy: imperfect integration of financial markets or of goods markets jeffrey a frankel conventional wisdom in the field of international finance holds that the us economy has become so open financially as to be charac- terized by perfect capital mobility: a highly elastic supply of foreign. This paper is a critical assessment of some recent empirical evidence on the extent of international capital mobility its major conclusion is that while much of this evidence is difficult to interpret without ambiguity, it is consistent with a world economy in which the degree of capital mobility is high and increasing two main. Capital mobility and stabilization policy under fixed and flexible exchange rates r a mundell mcgill university the world is still a closed economy, but its regions and countries are becoming increasingly open the trend, which has been manifested in both freer move- ment of goods and.
In this paper i use a new cross-country data set to investigate the effects of capital mobility on economic growth the new indicator of capital mobility used in this analysis is superior to previously used indexes in two respects: (1) it allows for intermediate situations, where a country's capital account is semi-open and (2) it is. Matthew watson draws a distinction between the spatial and the functional mobility of capital, allowing fresh insights into existing work on the subject whilst repoliticizing the very idea of capital being 'in motion' the dynamics of capital mobility and the patterns of risk exposure are. Asia has benefitted greatly from its integration into the world economy but globalization has its challenges, including those that are the subject. Recent trends in the globalization of markets have refocused attention on the evolution of international capital mobility over the long run this paper augments the literature by investigating criteria for capital mobility using time-series and cross-section analysis of saving-investment data for fifteen countries since circa 1850.