Capital account liberalization as a signal
1996
Bartolini, Leonardo | Drazen, Allan
We present a model in which a government's current capital controls policy signals future policies. Controls on capital outflows evolve in response to news on technology, conditional on government attitudes towards taxation of capital. When there is uncertainty over government types, a policy of liberal capital outflows sends a favorable signal that may trigger a capital inflow. This prediction is consistent with the experience of several countries that have liberalized their capital account.
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Publisher National Bureau of Economic Research | Cambridge, MA : National Bureau of Economic Research, ©1996
This bibliographic record has been provided by National Agricultural Library