TY  - JOUR
AU  - Klein,Michael W.
AU  - Olivei,Giovanni
TI  - Capital Account Liberalization, Financial Depth and Economic Growth
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7384
PY  - 1999
Y2  - October 1999
UR  - http://www.nber.org/papers/w7384
L1  - http://www.nber.org/papers/w7384.pdf
N1  - Author contact info:
Michael W. Klein
Fletcher School
Tufts University
Medford, MA 02155
Tel: (617) 627-2718
Fax: (617) 627-3712
E-Mail: michael.klein@tufts.edu

Giovanni Olivei
Federal Reserve Bank of Boston
600 Atlantic Avenue
Boston, MA 02106
E-Mail: giovanni.olivei@bos.frb.org
AB  - 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.
ER  -