Dilemma and global financial cycle : evidence from capital account liberalisation episodes / Xiang Li
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Discovery
1780922175
URN
urn:nbn:de:gbv:3:2-144417
DOI
ISBN
ISSN
Autorin / Autor
Beiträger
Körperschaft
Erschienen
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [08. Dezember 2021]
Umfang
1 Online-Ressource (III, 40 Seiten, A21, 2,85 MB) : Diagramme
Ausgabevermerk
This version: October 2021
Sprache
eng
Anmerkungen
Inhaltliche Zusammenfassung
By focusing on the episodes of substantial capital account liberalisation and adopting a new methodology, this paper provides new evidence on the dilemma and global financial cycle theory. I first identify the capital account liberalisation episodes for 95 countries from 1970 to 2016, and then employ an augmented inverse propensity score weighted (AIPW) estimator to calculate the average treatment effect (ATE) of opening capital account on the interest rate comovements with the core country. Results show that opening capital account causes a country to lose its monetary policy independence, and a floating exchange rate regime cannot shield this effect. Moreover, the impact is stronger when liberalising outward and banking flows.
Schriftenreihe
IWH-Diskussionspapiere ; 2021, no. 13 (December 2021) ppn:837399270