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Issues in capital account convertibility in developing countries

Schneider, Benu

Issues in capital account convertibility in developing countries - 2001

Examines the pace, sequencing and preconditions of capital liberalisation drawing lessons from the experience of twelve countries, and focusing on the inter-relationships between open capital and current accounts, the financial sector and the conduct of macro policies. Distinguishes between prudential limits and capital controls and discusses the effectiveness of direct and price controls. Makes a case for intermediate regimes with respect to exchange-rate policy. Concludes that developing countries need to adopt a gradualist approach to the opening up of the capital account, outlining three strategies and emphasizing that the capital account is only one aspect of a comprehensive reform package.










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