Financial Globalization and Inequality: Capital Flows as a Two-Edged Sword

Author/Editor:

Barry J. Eichengreen ; Balazs Csonto ; Asmaa A ElGanainy ; Zsoka Koczan

Publication Date:

January 8, 2021

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

We review the debate on the association of financial globalization with inequality. We show that the within-country distributional impact of capital account liberalization is context specific and that different types of flows have different distributional effects. Their overall impact depends on the composition of capital flows, their interaction, and on broader economic and institutional conditions. A comprehensive set of policies – macroeconomic, financial and labor- and product-market specific – is important for facilitating wider sharing of the benefits of financial globalization.

Series:

Working Paper No. 2021/004

Frequency:

regular

English

Publication Date:

January 8, 2021

ISBN/ISSN:

9781513566382/1018-5941

Stock No:

WPIEA2021004

Format:

Paper

Pages:

37

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