Capital account liberalization, economic growth and financial crisis
Panel organised by: Dinesh Kumar Nayak (National Institute of Public Finance and Policy, India)
Theory presumes that a higher degree of financial integration which usually comes with liberalization policy, the greater the volumes of capital inflows and outflows that are essential for economic growth. Evidence and empirical studies in advanced and developing countries question this causal relationship between financial globalization and economic growth. The East Asia financial crisis of the late 1990s and the global financial crisis of 2007–2009 raise doubts on the issue and have triggered a controversy on the benefits of capital account liberalization. Domestic macroeconomic fundamentals, policy interventions as well as the quality of governance also constitute crucial aspects of explaining regional and national growth. Against this background, the panel invites contributions that investigate the financial globalization from the perspective of the regional and individual country-specific situation in contemporary Asia.