Capital Account Liberalization and Inequality

27 Pages Posted: 3 Feb 2016

See all articles by Davide Furceri

Davide Furceri

International Monetary Fund (IMF)

Prakash Loungani

International Monetary Fund (IMF)

Date Written: November 2015

Abstract

This paper examines the distributional impact of capital account liberalization. Using panel data for 149 countries from 1970 to 2010, we find that, on average, capital account liberalization reforms increase inequality and reduce the labor share of income in the short and medium term. We also find that the level of financial development and the occurrence of crises play a key role in shaping the response of inequality to capital account liberalization reforms.

Keywords: Inequality, Capital Account Openness, Crises, Institutions, capital account, liberalization, capital account liberalization, standard deviations, Macroeconomic Analyses of Economic Development, All Countries, Institutions.,

JEL Classification: G32, F13, O11

Suggested Citation

Furceri, Davide and Loungani, Prakash, Capital Account Liberalization and Inequality (November 2015). IMF Working Paper No. 15/243, Available at SSRN: https://ssrn.com/abstract=2727188

Davide Furceri (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
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Prakash Loungani

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-7043 (Phone)
202-623-4740 (Fax)

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