Endogenous Financial Openness PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Endogenous Financial Openness PDF full book. Access full book title Endogenous Financial Openness by Joshua Aizenman. Download full books in PDF and EPUB format.
Author: Joshua Aizenman
Publisher:
ISBN:
Category : Commercial policy
Languages : en
Pages : 56
Get Book Here
Book Description
"This paper studies the endogenous determination of financial openness. We outline a framework where financial openness is endogenously determined by the authority's choice of financial repression as a taxation device, and where the private sector determines endogenously the magnitude of capital flight. The optimal financial repression is shown to depend on the openness of the economy to international trade, the efficiency of the tax system (which in turn may be affected by political economy considerations), and on political polarization and the degree of opportunism. Similar predictions are obtained in a model where authorities pursue an opportunistic policy representing the interest of a narrow pressure group that engages in capital flight due to political uncertainty. We confirm the predictions of the models, showing that de-facto financial openness [measured by (gross private capital inflows + outflows)/GDP] depends positively on lagged trade openness, and GDP/Capita. For developing countries, we find that a one standard deviation increase in commercial openness is associated with a 9.5 percent increase in de-facto financial openness (% of GDP), a one standard deviation increase in the democratization index reduces financial openness by 3.5%, and a one standard deviation increase in corruption is associated with a 3% reduction of financial openness. Similar negative dependence applies for measures of political competition. The impact of a budget surplus on financial openness is negative for developing countries, but positive for the OECD. The theoretical and empirical analysis leads us to conclude that a more openly competitive, free and inclusive political system will lead to lower levels of de-facto financial openness after controlling for incomes, macroeconomic policy (inflation and budget surpluses), interest rates and commercial openness"--NBER website
Author: Joshua Aizenman
Publisher:
ISBN:
Category : Commercial policy
Languages : en
Pages : 56
Get Book Here
Book Description
"This paper studies the endogenous determination of financial openness. We outline a framework where financial openness is endogenously determined by the authority's choice of financial repression as a taxation device, and where the private sector determines endogenously the magnitude of capital flight. The optimal financial repression is shown to depend on the openness of the economy to international trade, the efficiency of the tax system (which in turn may be affected by political economy considerations), and on political polarization and the degree of opportunism. Similar predictions are obtained in a model where authorities pursue an opportunistic policy representing the interest of a narrow pressure group that engages in capital flight due to political uncertainty. We confirm the predictions of the models, showing that de-facto financial openness [measured by (gross private capital inflows + outflows)/GDP] depends positively on lagged trade openness, and GDP/Capita. For developing countries, we find that a one standard deviation increase in commercial openness is associated with a 9.5 percent increase in de-facto financial openness (% of GDP), a one standard deviation increase in the democratization index reduces financial openness by 3.5%, and a one standard deviation increase in corruption is associated with a 3% reduction of financial openness. Similar negative dependence applies for measures of political competition. The impact of a budget surplus on financial openness is negative for developing countries, but positive for the OECD. The theoretical and empirical analysis leads us to conclude that a more openly competitive, free and inclusive political system will lead to lower levels of de-facto financial openness after controlling for incomes, macroeconomic policy (inflation and budget surpluses), interest rates and commercial openness"--NBER website
Author: Joshua Aizenman
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Get Book Here
Book Description
The authors study the endogenous determination of financial and trade openness. They construct a theoretical framework leading to two-way feedbacks between financial and trade openness and identify these feedbacks empirically. They find that one standard deviation increase in commercial openness is associated with a 9.5% increase in de facto financial openness (% of GDP). Similarly, an increase in de facto financial openness has powerful effects on future trade openness. De jure restrictions on capital mobility have only a weak impact on de facto financial openness, while de jure restrictions on the current account have a large adverse effect on commercial openness. The authors investigate the relative magnitudes of these directions of causality using Geweke's (1982) decomposition methodology. They conclude that in an era of rapidly growing trade integration, countries cannot choose financial openness independently of their degree of openness to trade. Dealing with greater exposure to turbulence by imposing restrictions on financial flows is likely to be ineffectual.
Author: Tarron Khemraj
Publisher: Edward Elgar Publishing
ISBN: 1782548386
Category : Social Science
Languages : en
Pages : 177
Get Book Here
Book Description
Despite the financial liberalization agenda of the mid-1980s, a system of bank oligopolies has developed in both large and small, open developing economies. Mainstream monetary theory tends to assume a capital markets structure and is therefore not wel
Author: Mr.Ayhan Kose
Publisher: International Monetary Fund
ISBN: 9781589062214
Category : Business & Economics
Languages : en
Pages : 68
Get Book Here
Book Description
This study provides a candid, systematic, and critical review of recent evidence on this complex subject. Based on a review of the literature and some new empirical evidence, it finds that (1) in spite of an apparently strong theoretical presumption, it is difficult to detect a strong and robust causal relationship between financial integration and economic growth; (2) contrary to theoretical predictions, financial integration appears to be associated with increases in consumption volatility (both in absolute terms and relative to income volatility) in many developing countries; and (3) there appear to be threshold effects in both of these relationships, which may be related to absorptive capacity. Some recent evidence suggests that sound macroeconomic frameworks and, in particular, good governance are both quantitatively and qualitatively important in affecting developing countries’ experiences with financial globalization.
Author: Delano Villanueva
Publisher: World Scientific
ISBN: 9812818308
Category : Business & Economics
Languages : en
Pages : 271
Get Book Here
Book Description
"This volume is a collection of published and unpublished papers that the author has written over the last two decades during part of his tenure at the International Monetary Fund, the South East Asian Central Banks Research and Training Center, and Singapore Management University. The policy-oriented book examines the links between macroeconomic policies and noninflationary, full-employment levels and growth rates of aggregate gross domestic product, with particular focus on the application in emerging markets of the tools of growth theory. Theoretically sound and grounded in practical wisdom, this book is an essential reading for economic, financial and developmental policymakers, professional economists, and undergraduate/graduate students in economics and social sciences."--BOOK JACKET.
Author: Mr.Pablo Emilio Guidotti
Publisher: International Monetary Fund
ISBN: 1451852452
Category : Business & Economics
Languages : en
Pages : 38
Get Book Here
Book Description
This paper examines the empirical relationship between long–run growth and the degree of financial development, proxied by the ratio of bank credit to the private sector as a fraction of GDP. We find that this proxy enters significantly and with a positive sign in growth regressions on a large cross–country sample, but with a negative sign using panel data for Latin America. Our findings suggest that the main channel of transmission from financial development to growth is the efficiency of investment, rather than its volume. We also present a model where the negative correlation between financial intermediation and growth results from financial liberalization in a poor regulatory environment.
Author: Niels Hermes
Publisher: Routledge
ISBN: 1135635447
Category : Business & Economics
Languages : en
Pages : 381
Get Book Here
Book Description
This collection brings together a collection of theoretical and empirical findings on aspects of financial development and economic growth in developing countries. The book is divided into two parts: the first identifies and analyses the major theoretical issues using examples from developing countries to illustrate how these work in practice; the second part looks at the implications for financial policy in developing countries.
Author: Mr.Etibar Jafarov
Publisher: International Monetary Fund
ISBN: 151351248X
Category : Business & Economics
Languages : en
Pages : 66
Get Book Here
Book Description
Financial repression (legal restrictions on interest rates, credit allocation, capital movements, and other financial operations) was widely used in the past but was largely abandoned in the liberalization wave of the 1990s, as widespread support for interventionist policies gave way to a renewed conception of government as an impartial referee. Financial repression has come back on the agenda with the surge in public debt in the wake of the Global Financial Crisis, and some countries have reintroduced administrative ceilings on interest rates. By distorting market incentives and signals, financial repression induces losses from inefficiency and rent-seeking that are not easily quantified. This study attempts to assess some of these losses by estimating the impact of financial repression on growth using an updated index of interest rate controls covering 90 countries over 45 years. The results suggest that financial repression poses a significant drag on growth, which could amount to 0.4-0.7 percentage points.
Author: Mr.Stijn Claessens
Publisher: International Monetary Fund
ISBN: 1475561008
Category : Business & Economics
Languages : en
Pages : 66
Get Book Here
Book Description
This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.
Author: Philip Arestis
Publisher: Edward Elgar Publishing
ISBN: 1847202802
Category : Business & Economics
Languages : en
Pages : 535
Get Book Here
Book Description
Consists of over 30 major contributions that explore a range of work on money and finance. The contributions in this handbook cover the origins and nature of money, detailed analyses of endogenous money, surveys of empirical work on endogenous money and the nature of monetary policy when money is endogenous.
