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In the late eighties, many developing countries followed the example of the most advanced countries and opened their capital account (K.A.) in an attempt to reap new gains from increased integration with the world economy. Currently, after the wave of financial and currency crises that hurt the global economy over the last decade, enthusiasm about K.A. liberalization has greatly faded. First, the relationship between development and capital account liberalization did not come out to be as solid as initially expected; second, the greater capital mobility has brought about new forms of financial instability. This paper points to some risks that might be associated with undifferentiated deregulation of international movements of capital in connection with developing economies. It argues in favor of proper sequencing: liberalization should proceed in parallel with progress when it comes to macroeconomic stability, building market competition and the creation of a sound, internal financial system. A separate section analyzes this issue in the special context of transition economies.

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  • Impact Factor (2019): 0.914
  • Economics and Econometrics SJR Quartile Score (2019): Q2
  • Scimago Journal Rank (2018): 0.311
  • SJR Hirsch-Index (2018): 11

Language: English

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Editor(s)-in-Chief: Prof. Dr. Mihályi, Péter

Editor(s): Ványai, Judit

Editorial Board

      Török, Ádám (Chairman)
      Berlinger, Edina
      Halmai, Péter
      Kézdi, Gábor
      Kónya, István
      Köllő, János
      Magas, István

Advisory Board

      Ǻslund, Anders
      Kolodko, Grzegorz
      Mau, Vladimir
      Messerlin, Patrick A
      Nuti, Mario Domenico
      Wagener, Hans-Jürgen

Corvinus University of Budapest
Department of Macroeconomics
Fővám tér 8, Budapest, H-1093, Hungary

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