@unpublished {66011,
	title = {Financial Globalization, A Reappraisal},
	year = {2006},
	note = {Revised version of International Monetary Fund, Working Paper WP/06/189, August 2006.Download PDF},
	month = {Dec 1, 2006},
	abstract = {The literature on the benefits and costs of financial globalization for developing countries has
exploded in recent years, but along many disparate channels with a variety of apparently
conflicting results. There is still little robust evidence of the growth benefits of broad capital
account liberalization, but a number of recent papers in the finance literature report that
equity market liberalizations do significantly boost growth. Similarly, evidence based on
microeconomic (firm- or industry-level) data shows some benefits of financial integration
and the distortionary effects of capital controls, while the macroeconomic evidence remains
inconclusive. At the same time, some studies argue that financial globalization enhances
macroeconomic stability in developing countries, while others argue the opposite. We
attempt to provide a unified conceptual framework for organizing this vast and growing
literature, particularly emphasizing recent approaches to measuring the catalytic and indirect
benefits to financial globalization. Indeed, we argue that the indirect effects of financial
globalization on financial sector development, institutions, governance, and macroeconomic
stability are likely to be far more important than any direct impact via capital accumulation
or portfolio diversification. This perspective explains the failure of research based on crosscountry
growth regressions to find the expected positive effects of financial globalization and
points to newer approaches that are potentially more useful and convincing.},
	author = {Rogoff, Kenneth S. and Kose, M. Ayhan and Prasad, Eswar and Shang-Jin Wei}
}
