Financial Stability in Open Economies

Changing financial systems in open economies: Sri Lanka's experience

tions of an independent developing nation. In this context, as in other developing countries, an important function of the Government and the CBSL was to promote the development of the country’s financial system. In the 1960s and 1970s, the major emphasis was on localising and expanding the financial system into remote areas with state support and participation. The Government intervened in the...

Financial Development and the Instability of Open Economies

This paper introduces a framework for analyzing the role of …nancial factors as a source of instability in small open economies. Our basic model is a dynamic open economy model with a tradeable good produced with capital and a country-speci…c factor. We also assume that …rms face credit constraints, with the constraint being tighter at a lower level of …nancial development. A basic implication ...

Antitrust in Open Economies

We examine antitrust rules in a two county general equilibrium trade model, contrasting national and multilateral (cooperative) determination of competition policy, exploring the properties of policy equilibrium. It is not imperfect competition, but variation in competitive stance between sectors that matters for trading partners. Beggar-thy-neighbor competition policies relate to countries’ co...

Capitalist Diversity in Open Economies

Competition Policy in Open Economies

What is the e®ect of national antitrust policies in a world with international trade? Traditionally, economic analysis of mergers has assumed a closed economy, which as we show in this paper, may lead to errant policy in an open economy. We use a very simple model to highlight some key issues in optimal competition policy when trade is important, and compare the nationally optimal number of ̄rm...