NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Capital Account Liberalization, Financial Depth and Economic Growth

Michael W. Klein, Giovanni Olivei

NBER Working Paper No. 7384
Issued in October 1999, Revised in June 2006
NBER Program(s):   IFM

We show a statistically significant and economically relevant effect of open capital accounts on financial deepness and economic growth in a cross-section of countries over the period 1986 to 1995. Countries with open capital accounts over some or all of this period had a significantly greater increase in financial depth than countries with continuing capital account restrictions, and they also enjoyed greater economic growth. There results, however, are largely driven by the developed countries in the sample. The observed failure of capital account liberalization to promote financial deepness among developing countries suggests potentially important policy implications concerning the desirability of liberalizing the capital account.

download in pdf format
   (136 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7384

Published: Klein, Michael W. and Giovanni P. Olivei. "Capital Account Liberalization, Financial Depth, and Economic Growth." Journal of International Money and Finance 27, 6 (October 2008): 861-75.

Users who downloaded this paper also downloaded* these:
Edwards w8076 Capital Mobility and Economic Performance: Are Emerging Economies Different?
Henry w12698 Capital Account Liberalization: Theory, Evidence, and Speculation
Klein w11112 Capital Account Liberalization, Institutional Quality and Economic Growth: Theory and Evidence
Caballero and Krishnamurthy w10532 Fiscal Policy and Financial Depth
Edison, Klein, Ricci, and Sloek w9100 Capital Account Liberalization and Economic Performance: Survey and Synthesis
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us