TY  - JOUR
AU  - Kaminsky,Graciela
AU  - Schmukler,Sergio
TI  - Short-Run Pain, Long-Run Gain: The Effects of Financial Liberalization
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9787
PY  - 2003
Y2  - June 2003
UR  - http://www.nber.org/papers/w9787
L1  - http://www.nber.org/papers/w9787.pdf
N1  - Author contact info:
Graciela L. Kaminsky
Department of Economics
George Washington University
Washington, DC  20052
Tel: 202/994-6686
Fax: 202/994-6147
E-Mail: graciela@gwu.edu

Sergio Schmukler
The World Bank
MSN MC3-301
1818 H Street, N.W.
Washington, DC 20433
Tel: 202-458-4167
Fax: 202-522-3518
E-Mail: Sschmukler@worldbank.org
AB  - We examine the short- and long-run effects of financial liberalization on capital markets. To do so, we construct a new comprehensive chronology of financial liberalization in 28 mature and emerging economies since 1973. We also construct an algorithm to identify booms and busts in stock market prices. Our results indicate that financial liberalization is followed by more pronounced boom-bust cycles in the short run. However, financial liberalization leads to more stable markets in the long run. Finally, we analyze the sequencing of liberalization and institutional reforms to understand the contrasting short- and long-run effects of liberalization.
ER  -