2010/2011
Growth-Volatility Tradeoff in the Face of Financial Openness: A Perspective of Developing Economics
Cambridge Review of International Affairs, 23(4), 609-622
| Author(s) | Li Sheng |
|---|---|
| Summary | This paper analyses optimal tradeoffs between economic growth and economic volatility given the risk of open capital markets in developing countries due to their financial vulnerability to unfettered capital flows. It is argued that free policy choices are efficiently superior to free capital mobility and that a developing country can be open to higher growth and lower volatility only if its financial system is substantially strengthened. |