When Does Capital Account Liberalization Help More than It Hurts?

Arteta, Carlos; Eichengreen, Barry; Wyplosz, Charles

doi:10.3386/w8414

Cited by 125 publications

(88 citation statements)

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“…Similarly,Bekaert et al (2002) found that the impact of financial liberalization on growth depends on the country's level of secondary school enrollment. However,Arteta et al (2001) found that Edwards' results were not robust; and Bekaert, Harvey and Lundblad focused only on stock market liberalization.…”

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confidence: 91%

“…In this model a greater variety of inputs does more for production than a greater quantity of a narrow range of inputs. Thus, access to a variety of foreign inputs at a lower cost shifts the economy-wide 1 As discussed by Eichengreen (2001), however, although there is evidence suggesting that international financial openness and financial development may raise growth -as in Bekaert, Harvey and Lundblad (2002), Bosworth and Collins (2000), Jalilian and Kirkpatrick (2002) there is some debate as to the exact magnitude of these effects. Klein and Olivei (2001), for instance, analyzed the effects of capital account liberalization on growth and financial depth for a cross-section of countries over the period 1986-95.…”

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confidence: 93%

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Does globalization hurt the poor?

Agénor

2004

International Economics and Economic Policy

118

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This paper examines analytically and empirically the extent to which globalization affects the poor in developing countries. I begin with a description of various channels through which trade openness and financial integration may have an adverse effect on poverty. I also stress the possible non-linearities involved – possibilities that have been seldom recognized in the existing literature. I then present cross-country regressions that relate measures of real and financial integration to poverty. The regressions control for changes in income per capita, as well as various other macroeconomic and structural variables, such as inflation, changes in the real exchange rate and the terms of trade, and schooling indicators. I use both individual indicators of trade and financial openness, and a “globalization index” based on principal components analysis, and test for both linear and nonlinear effects. The results suggest the existence of an inverted U-shape relationship between globalization and poverty. At low levels, globalization appears to hurt the poor; but beyond a certain threshold, it seems to reduce poverty – possibly because it brings with it renewed impetus for reform. Thus, globalization may hurt the poor not because it went too far, but rather because it did not go far enough. Copyright Springer-Verlag Berlin Heidelberg 2004Globalization, poverty, cross-country regressions,

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confidence: 91%

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confidence: 93%

Does globalization hurt the poor?

Agénor

2004

International Economics and Economic Policy

118

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“…Corruption has been linked to the share of foreign direct investment in inflows, a more stable source of funding (Wei and Yi, 2002). Good institutions augment the positive effect of capital account liberalization on both financial development (Chinn and Ito, 2005) and growth (Alfaro et al, 2003;Arteta et al, 2001;Klein, 2005). Prasad et al (2004) find that institutional quality has a similar effect on the impact of financial globalization on growth and consumption volatility.…”

Section: Introductionmentioning

confidence: 87%

Do improvements in government quality necessarily reduce the incidence of costly sudden stops?

Honig

2008

Journal of Banking & Finance

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“…In this way, we allow the effects of exchange rates to be contingent on the stage of institutional development. Allowing for these types of contingent effects has become common in studying open economy macroeconomics, such as Arteta et al (2001), who investigate the impact of capital account openness on growth, and Levy-Yeyati and Sturzenegger (2003) who examine the impact of exchange rate regimes on growth.…”

Section: Methodsmentioning

confidence: 99%