External Financial Liberalization and Macroeconomic Performance in Emerging Countries

An Empirical Evaluation of the Brazilian Case

Bibliographic Data

ID3885352
AuthorsAndré Moreira Cunha (0000-0002-3746-5974, Universidade Federal do Rio Grande do Sul, corresponding author), Daniela Magalhães Prates (0000-0003-3383-5736), Pedro Pereira Da Silva (0000-0002-2469-0996), Pedro Perfeito Da Silva
Year2020
Volume51
Issue5
Pages1225-1245
Publication date2020-09-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueDevelopment and Change (JOURNAL)
Journal identifiersISSN: 0012-155X • E-ISSN: 1467-7660
PublisherWiley (PUBLISHER • GB)
DOI10.1111/dech.12602
OpenAlexW3041629554
LanguageEN
References cited51

This article evaluates the effects of external financial liberalization on Brazilian macroeconomic performance from 1995 to 2016. Its main contributions are to assess the influence of the global financial cycle on the level of external financial liberalization and to analyse the short- and long-run macroeconomic effects of such liberalization on the performance of a peripheral economy in the global currency hierarchy. Methodologically, the article employs the Markov-Switching Vector Autoregressive and Vector Error Correction models. The results show that the global financial cycle directly affects cross-border financial flows and frames the impact of external financial liberalization on the macroeconomic performance. The article concludes that external financial liberalization has negative macroeconomic effects in the short run and generates a trade-off between stability and growth in the long run

Cointegration · Currency · Econometrics · Economics · Error correction model · International economics · Liberalization · Macroeconomics · Market economy · Markov chain · Monetary economics · Short run · Economic Theory and Policy · Global Financial Crisis and Policies · Monetary Policy and Economic Impact

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