NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Capital Account Liberalization and Economic Performance: Survey and Synthesis

Hali J. Edison, Michael W. Klein, Luca Ricci, Torsten Sloek

NBER Working Paper No. 9100
Issued in August 2002
NBER Program(s):Economic Fluctuations and Growth, International Finance and Macroeconomics

This paper reviews the literature on the effects of capital account liberalization and stock market liberalization on economic growth. The various empirical measures used to gauge the presence of controls on capital account transactions as well as indicators of stock market liberalization are discussed. We compare detailed measures of capital account controls that attempt to capture the intensity of enforcement with others that simply capture whether or not controls are present. Our review of the literature shows the contrasting results that have been obtained. These differences may reflect differences in country coverage, sample periods and indicators of liberalization. In order to reconcile these differences, we present new estimates of the effects on growth of capital account liberalization and stock market liberalization. We find some support for a positive effect of capital account liberalization on growth, especially for developing countries.

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Document Object Identifier (DOI): 10.3386/w9100

Published: Hali J. Edison & Michael W. Klein & Luca Antonio Ricci & Torsten Sl√łk, 2004. "Capital Account Liberalization and Economic Performance: Survey and Synthesis," IMF Staff Papers, Palgrave Macmillan Journals, vol. 51(2), pages 2. citation courtesy of

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