Capital account liberalization as a signal by Leonardo Bartolini

Cover of: Capital account liberalization as a signal | Leonardo Bartolini

Published by National Bureau of Economic Research in Cambridge, MA .

Written in English

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Subjects:

  • Capital -- Mathematical models.,
  • Capital -- Accounting.,
  • Monetary policy -- Econometric models.,
  • Banks and banking, Central -- Econometric models.,
  • Inflation (Finance) -- Econometric models.

Edition Notes

Book details

StatementLeonardo Bartolini, Allan Drazen.
SeriesNBER working paper series -- no. 5725, Working paper series (National Bureau of Economic Research) -- working paper no. 5725.
ContributionsDrazen, Allan., National Bureau of Economic Research.
The Physical Object
Pagination29, [9] p. :
Number of Pages29
ID Numbers
Open LibraryOL22412156M

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Capital Account Liberalization as a Signal Leonardo Bartolini, Allan Drazen. NBER Working Paper No. (Also Reprint No. r) Issued in August NBER Program(s):International Finance and Macroeconomics We present a model in which a government's current capital controls policy Cited by: Capital-Account Liberalization as a Signal By LEONARDO BARTOLINI AND ALLAN DRAZEN * We present a model in which a government's current capital-control policy sig-nals future policies.

Controls on capital outflows evolve in response to news on technology, conditional on government attitudes toward taxation of capital.

When. When there is uncertainty over government types, a policy of liberal capital outflows sends a positive signal that may trigger a capital inflow. This prediction is consistent with the experience of several countries that have recently liberalized their capital accounts.

The full text of this report is not available. Capital account liberalization as a signal. Cambridge, MA: National Bureau of Economic Research, © (OCoLC) Material Type: Internet resource: Document Type: Book, Internet Resource: All Authors / Contributors: Leonardo Bartolini; Allan Drazen; National Bureau of Economic Research.

Capital account liberalization as a signal book Genre/Form: Electronic book: Additional Physical Format: Print version: Bartolini, Leonardo. Capital account liberalization as a signal. Cambridge, MA: National Bureau of Economic Research, © "Capital Account Liberalization as a Signal," NBER Working PapersNational Bureau of Economic Research, Inc.

Leonardo Bartolini & Allan Drazen, " Capital account liberalization as a signal," Staff Repo Federal Reserve Bank of New York. Capital Account Liberalization as a Signal - CORE Reader. Capital Account Liberalization as a Signal.

By Leonardo Bartolini and Allan Drazen. Get PDF (1 MB) Abstract. We present a model in which a government's current capital controls policy signals future policies. Controls on capital outflows evolve in response to news on technology, conditional on government attitudes towards taxation of capital.

Capital-Account Liberalization as a Signal. We present a model in which a government's current capital-control policy sig- nals future policies. Controls on capital outflows evolve in response to news on technology, conditional on government attitudes toward taxation of capital.

When there is uncertainty over government types, a policy of. capital account has come under closer scrutiny and a broad consensus − generally reflected at the conference − has formed around the institutional and macroeconomic preconditions that should be in put place before, or at least pursued simultaneously with, capital account liberalisation.

The pace and sequencing of capital account. Capital account liberalization and financial liberalization more generally are inevitable for countries that wish to take advantage of the substantial benefits from participating in the open world economic system in today's age of modern information and communications technologies.

When there is uncertainty over government types, a policy of liberal capital outflows sends a positive signal that may trigger a capital inflow.

This prediction is consistent with the experience of several countries that have recently liberalized their capital accounts. NBER Working Paper August CAPITAL ACCOUNT LIBERALIZATION AS A SIGNAL ABSTRACT We present a model in which a government’s current capital controls policy signals future policies.

Controls on capital outflows evolve in response to news on technology, conditional on government attitudes towards taxation of capital.

According to column (2), capital account liberalization is as- sociated with an increase in the capital in ows-to-GDP ratio of percentage points (=2*).

This is a sizable e ect, explaining 45% of the capital in ows standard de- viation (=/). A capital account liberalization is a decision by a country’s government to move from a closed capital account regime, where capital may not move freely in and out of the country, to an open.

Capital Account Liberalization Share Quinn Code of Liberalization of Capital Movements Intensity of Capital Controls Correlation between Indicators Effectiveness of Capital Controls Timing Composition of Inward Capital Flows. Theory & Evidence: Capital Account Liberalization and.

Liberalization of a country's capital account may signal a shift toward sound economic policy. This unrestricted movement of capital means governments, corporations, and individuals are. Advocates of restrictions on international capital mobility tend to view capital flows as a frequently destabilizing exogenous element that complicates the task.

Capital Controls In Emerging Economies book. Capital Controls In Emerging Economies. Capital Account Liberalization and Policy Incentives: An Endogenous Policy View. debunking the myth that capital account liberalization is necessarily good for economic growth and income distribution, and several chapters at the end that offer some solutions to the problem of capital flight that affects so much of the developing world.

This chapter briefly introduces the book. First, however, is the matter of definition. The term capital flow measures refers to all quantitative or price-based regulations of capital flows, including macroprudential measures pertaining to capital flows.

This subsumes other commonly and interchangeably used terms such as capital account policies, capital controls, or capital account liberalization.

37 Chile reduced its unremunerated reserve requirements to zero in as economic conditions improved, but it has kept them on the books for future use; see Sebastian Edwards, “Capital Flows, Real Exchange Rates and Capital Controls,” in Edwards (fn. 19); Francisco Nadal-De Simone and Prirtta Sorsa, “A Review of Capital Account Restrictions in Chile in the s,” International.

The literature on capital account liberalization, or a more narrow scope–stock market liberalization, primarily focuses on examining the effects of initial or first-time liberalization, which has occurred in emerging markets countries in the late s (e.g., Bekaert and Harvey,Chari and Henry,Henry, b, Henry,Henry,Mitton,Taskin and Muradoglu, ).

‎Capital account liberalization is a complex process and its success requires proper sequencing and coordination with macroeconomic and other policies, particularly structural policies, to strengthen the domestic financial system.

Reflecting varying approaches and initial conditions, some countries h. decreased restrictions on cross border financial transactions related to the capital account. However, outside of the OECD countries, little is known about the decision of whether and when to remove such restrictions, despite the fact that much of the radical liberalization – particularly in the s – took place in the developing world.

the aspects of capital account liberalization will be discussed. Starting with the way in which capital flows are allocated to different categories and how these categories can be imprecise.

Financial sector weaknesses - including inadequate regulation and supervision, implicit deposit insurance, concentrated ownership structures, and poor accounting and disclosure - combined with liberalization of the financial sector and capital accounts, increased vulnerability by creating incentives for risk-taking by financial institutions.

Bartolini Leonardo, and Drazen Allan a “ Capital-Account Liberalization as a Signal.” American Economic Review 87 (1): – This paper empirically analyzes the effects of exchange rate regimes and capital account liberalization policies on the occurrence of currency crises in 21 countries over the period of – We examine the changes of the likelihood of currency crises under the.

Bartolini, Leonardo and Allan Drazen (), ‘Capital Account Liberalization as a Signal’, American Economic Review, 87, – Google Scholar Bayoumi, Tamim (), ‘Financial Deregulation and Household Saving’, Economic Journal, (), – October Capital Account Liberalization in China 3 capital account liberalization in Japan, India, South Korea, Latin America, Cen-tral and Eastern Europe, and beyond.

Participants also reviewed the economic evidence pertaining to capital account liberalization, as well as new policy at the.

implementing exchange rate flexibility and capital account liberalization. The Chinese authorities have stated publicly that both exchange rate flexibility and capital account convertibility are their medium-term objectives, but they have resisted recent calls from the international community for an.

"Capital account liberalization, it is fair to say, remains one of the most controversial and least understood policies of our day". (Eichengreen, ) This paper is a theoretical study into how an economy adjusts to the liberaliza-tion of international –nancial transaction Œcapital account liberalization.

Although. In theory, capital account liberalization should have unambiguous benefits in terms of promoting more efficient international allocation of capital, boosting growth in developing countries through a variety of channels, and allowing countries to reduce their consumption volatility by offering opportunities for sharing income risk.

Direct benefit: capital account liberalization as an end in itself Open capital account offers better benefit-risk tradeoff for DMs than for EMs “Threshold” effect: opening-up may be increasingly favorable for China over time (Kose, Prasad & TaylorWei ).

capital. Capital account liberalization also provides an opportunity for a country’s currency to be accepted outside its borders, making trade transactions easier and less costly. On the other hand, however, capital market liberalization, especially that of short-term capital flows, can add to instability within the financial system.

The capital account, on a national level, represents the balance of payments for a country. The capital account keeps track of the net change in a. Capital account liberalization was once seen as an inevitable step along the path to economic development for poor countries.

Liberalizing the capital account, it was said, would permit financial resources to flow from capital-abundant countries, where expected returns were low, to capital-scarce countries, where expected returns were high. | May More Working Papers. Optimal Capital Account Liberalization in China.

Author(s): Zheng Liu, Mark M. Spiegel, and Jingyi Zhang China maintains tight controls over its capital account. Its current policy regime also features financial repression, under which banks are required to extend funds to state-owned enterprises (SOEs) at favorable terms, despite their lower.

A more flexible exchange rate regime would allow China to operate a more independent monetary policy, providing a useful buffer against domestic and external shocks. At the same time, weaknesses in China's financial system suggest that capital account liberalization poses significant risks and should be a lower priority in the short term.

The impacts of various dimensions of capital account liberalization can help narrow the discussion on specific opening policies. Third, we employ the difference-in-difference (DID) approach combined with propensity score matching (PSM) to estimate the impact of opening the capital account on income inequality in a year window.

In macroeconomics and international finance, the capital account records the net flow of investment transaction into an economy. It is one of the two primary components of the balance of payments, the other being the current s the current account reflects a nation's net income, the capital account reflects net change in ownership of national assets.

In this case, we would have a smooth increase in capital inflows as the minimum required period for repatriation declines. Can a liberalization of capital outflows increase net capital inflows: R M LabSn and F B Larrain References Bartolini, L. and Drazen, A. () Capital account liberalization as a signal, Working Paper No 9.Capital Account Liberalization and Financial Sector Stability Paperback – January 1, by Shogo Ishii (Author), International Monetary Fund (Author) See all formats and editions Hide other formats and editions.

Price New from Used from Kindle "Please retry" $ — — Paperback "Please retry" $Author: Shogo Ishii, International Monetary Fund.

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