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Financial Liberalization, Property Rights, and Growth in an Overlapping‐Generations Model
Author(s) -
Bellettini Giorgio,
Ceroni Carlotta Berti
Publication year - 2000
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00226
Subject(s) - ceteris paribus , property rights , economics , overlapping generations model , liberalization , endogenous growth theory , capital (architecture) , welfare , politics , capital accumulation , growth model , capital deepening , monetary economics , international economics , macroeconomics , market economy , human capital , financial capital , microeconomics , capital formation , law , political science , history , archaeology
Using an endogenous growth model in which countries differ with respect to property rights protection, the paper analyzes the growth and welfare effects of removing capital controls, and studies the political support for a reform which improves the quality of property rights. When these are poorly protected, liberalization of capital movements may foster growth in the short run but eliminates it in the long run. The removal of capital controls may benefit agents at the time of liberalization, hurting future generations. Ceteris paribus , political support for a reform of property rights is stronger in the closed than in the open economy.