Does capital account liberalisation promote economic growth? Evidence from system estimation

View/ Open
Author(s)
Carmignani, F
Griffith University Author(s)
Year published
2008
Metadata
Show full item recordAbstract
This paper proposes a three-equations empirical representation of the channels linking capital account liberalization (CAL) and economic growth. System estimates indicate that CAL determines growth through financial development and openness to trade. The residual effect of CAL on growth after accounting for these two channels is negligible. These results call for a reconsideration of the conclusions on the growth-effect of CAL drawn from single-equation empirical models.This paper proposes a three-equations empirical representation of the channels linking capital account liberalization (CAL) and economic growth. System estimates indicate that CAL determines growth through financial development and openness to trade. The residual effect of CAL on growth after accounting for these two channels is negligible. These results call for a reconsideration of the conclusions on the growth-effect of CAL drawn from single-equation empirical models.
View less >
View less >
Journal Title
Economics Bulletin
Volume
6
Issue
49
Publisher URI
Copyright Statement
© The Author(s) 2008. The attached file is reproduced here in accordance with the copyright policy of the publisher. For information about this journal please refer to the publisher’s website or contact the author.
Subject
Economic Development and Growth
Economics