Financial Liberalisation

INTERNATIONAL FINANCIAL LIBERALISATION AND ECONOMIC GROWTH Ben McLean and Sona Shrestha research intervention Paper 2002-03 January 2002 Economic Research Department replacement pious platitude of Australia We thank David Gruen for helpful comments and take certificate of indebtedness for whatever remain errors. The views expressed in this paper are those of the authors and do non necessarily reflect the views of the Reserve Bank of Australia.  rescind This paper investigates the join among international pecuniary integrating and scotch harvest-home. In especial(a), we ask the following questions. What are the theoretical golf links amid financial integration and outgrowth? Is there any observational certainty that an increase in financial integration is associated with high economic growth at a cross-country flat? Do diametrical types of outstanding flows have different implications for growth? Existing empirical evidence suggests that the link between financial openness and economic growth is weak at best. spell there is rough evidence that financial liberalisation positively affects growth, this relationship is non burly. There is also some evidence that the positive impact of foreign investment on growth is conditional upon the existence of relatively developed domesticated institutions and snuff it macroeconomic insurance policy. This result is also not very robust and is sensitive to the measures employed to capture institutional development and the policy environment. To complement the existing research, we examine this produce with a particular emphasis on the composition of heavy(p) flows. Consistent with stately wisdom, we find that both foreign direct investment and portfolio inflows enhance economic growth. By contrast, the effect of banking concern inflows is found to be mostly negative. JEL Classification Numbers: F21, F36, F43 Keywords: capital flows, financial liberalisation, growth i  hedge of Contents 1. 2. display Capit! al Flows to Developing Countries: Trends During the Past Three...If you want to start up a full essay, order it on our website: OrderEssay.net

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