Title: Capital account liberalization, institutional quality, and economic growth
First published: 2005
Description: "This paper shows that the effect of capital account liberalization on growth depends upon the environment in which that policy occurs.  A theoretical model demonstrates the possibility of an inverted-U shaped relationship between the responsiveness of growth to capital account liberalization and institutional quality.  Three empirical specifications based on the model are estimated using a panel of 71 countries.  Estimates of all three specifications support the hypothesis of a non-monotonic interaction between the responsiveness of growth to capital account liberalization and institutional quality, with about one-quarter of the countries, those with better (but not the best) institutions exhibiting a statistically significant and economically meaningful effect of capital account openness on economic growth"--National Bureau of Economic Research web site.
Subjects: Mathematical models, Fiscal policy, Accounting, Capital movements, Capital, Economic development
LC classification: HB1