Financial Liberalization and International Business Cycle
نویسندگان
چکیده
The majority of OECD countries has experienced a reduction in macroeconomic volatility during the last two decades. This period is also characterized by a gradual liberalization of the capital accounts of from these countries. The goal of this paper is to study whether capital markets liberalization can lead to lower macroeconomic volatility. We study a business cycle model with multiple countries and financial market frictions and characterize the conditions under which financial liberalization leads to lower aggregate volatility.
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