Author: Sebastian Edwards Publisher: ISBN: Category : Capital Languages : en Pages : 46
Book Description
This paper deals with the dynamics of trade and capital account liberalization in a developing country. The welfare consequences of trade and capital account liberalization under alternative sequencing scenarios are investigated. We draw on standard trade theory results to show that the opening of the capital account in the presence of trade distortions may be welfare reducing if foreign borrowing is used to increase investment. However we demonstrate that this welfare reducing effect of opening the capital account will not occur if shadow prices are used to guide investment decisions. It is then shown that if capital market restrictions fall disproportionally on investment (as opposed to consumption) a gradual reduction of import tariffs is superior to an abrupt trade liberalization.
Author: Joseph E. Stiglitz Publisher: Oxford University Press, USA ISBN: 0199230587 Category : Business & Economics Languages : en Pages : 388
Book Description
Capital market liberalization has been a key part of the ongoing debate on globalization. Bringing together leading researchers and practitioners in the field, this book provides a unique analysis of both the risks associated with capital market liberalization and the alternative policy options available to enhance macroeconomic management.
Author: Norman S. Fieleke Publisher: Princeton, N.J. : International Finance Section, Department of Economics, Princeton University ISBN: Category : Business & Economics Languages : en Pages : 40
Author: Mr.Nizar Jouini Publisher: International Monetary Fund ISBN: 1484367731 Category : Business & Economics Languages : en Pages : 43
Book Description
We propose an integrated method based on a two-sector small open economy dynamic and stochastic general equilibrium model to estimate non-tariff barriers and quantify the impact of services liberalization. The major component of trade barriers is explicitly modeled through the introduction of entry-sunk costs. Hence, liberalization is treated assuming a government's policy decision aimed at reducing those costs. Then, we estimate the model using Bayesian techniques for Tunisia and the Euro Area. The paper presents a precise quantitative evaluation of services trade barriers as the difference between entry-sunk costs in Tunisia versus the Euro Area. We find significant welfare benefits in addition to aggregate and sectoral growth gains the Tunisian economy could attain following services liberalization. Surprisingly, the goods sector is the one that benefits the most from services liberalization in the short- and long-term horizons.
Author: Peter Blair Henry Publisher: ISBN: 9780979037634 Category : Capital Languages : en Pages : 82
Book Description
"Writings on the macroeconomic impact of capital account liberalization find few, if any, robust effects of liberalization on real variables. In contrast to the prevailing wisdom, I argue that the textbook theory of liberalization holds up quite well to a critical reading of this literature. The lion's share of papers that find no effect of liberalization on real variables tell us nothing about the empirical validity of the theory, because they do not really test it. This paper explains why it is that most studies do not really address the theory they set out to test. It also discusses what is necessary to test the theory and examines papers that have done so. Studies that actually test the theory show that liberalization has significant effects on the cost of capital, investment, and economic growth"--National Bureau of Economic Research web site.
Author: Ester Faia Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
In recent decades, capital account liberalization in emerging economies has often been followed by a surge in capital inflows, despite the presence of severe informational asymmetries for foreign lenders. Empirical studies have shown that in emerging economies financial liberalization has led to an increase in consumption volatility (also relative to output). I use a small open economy model where foreign lending to households is constrained by an endogenous borrowing limit. Borrowing is secured by collateral in the form of durable investment whose accumulation is subject to adjustment costs. This economy is able to replicate the aforementioned stylized fact in response to various shocks (productivity, foreign demand and government expenditure). I find that financial liberalization reduces welfare since it increases the volatility of consumption and employment.
Author: Sebastian Edwards Publisher: ISBN: Category : Balance of payments Languages : en Pages : 108
Book Description
The opening up of an economy to the rest of the world has generally been considered an integral part of economic reform aimed at increasing the role of markets. Until recently, however, very little discussion was devoted to the order in which the capital and current account should be liberalized indeveloping countries. This paper deals with several aspects of the order of liberalization. The different arguments usually given to advocate a particular ordering are critically reviewed. Then a three-good two-factor model is used to analyze the effects of alternative ordering on production and income distribution. A two-period model of a small economy is also used to investigate the welfare effects of opening the capital account in the presence of distortions. While the discussion does not yield a theorem regarding the appropriate order of liberalization, there are strong presumptions that it is more prudent to liberalize the current account first.
Author: Sebastian Edwards
Author: Sebastian Edwards
Author: Joseph E. Stiglitz
Author: Pertti Haaparanta
Author: Norman S. Fieleke
Author: Mr.Nizar Jouini
Author: Sebastian Edwards
Author: Peter Blair Henry
Author: Ester Faia
Author: Sebastian Edwards