IMF Working Papers

Capital Account Liberalization and Inequality

ByDavide Furceri, Prakash Loungani

November 24, 2015

More Formats on IMF eLibrary
Order a Print Copy

Preview Citation

Format: Chicago

Davide Furceri, and Prakash Loungani. "Capital Account Liberalization and Inequality", IMF Working Papers 2015, 243 (2015), accessed 12/6/2025, https://doi.org/10.5089/9781513531083.001

Export Citation

  • ProCite
  • RefWorks
  • Reference Manager
  • BibTex
  • Zotero
  • EndNote
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the distributional impact of capital account liberalization. Using panel data for 149 countries from 1970 to 2010, we find that, on average, capital account liberalization reforms increase inequality and reduce the labor share of income in the short and medium term. We also find that the level of financial development and the occurrence of crises play a key role in shaping the response of inequality to capital account liberalization reforms.

Subject: Balance of payments, Capital account, Capital account liberalization, Income distribution, Income inequality, National accounts, Personal income

Keywords: capital account, Capital account, Capital account liberalization, capital account liberalization reforms lead, Capital Account Openness, capital liberalization episode, Crises, effect of liberalization, Gini growth, Global, Globalization, globalization reform, impact of capital account liberalization reform, Impulse response functions, Income distribution, Income inequality, Inequality, Institutions, liberalization date, liberalization reform, occurrence of a liberalization reform, occurrence of the liberalization reform, Personal income, WP

You May Also Be Interested In...

Tourism in the Post-Pandemic World: Economic Challenges and Opportunities for Asia-Pacific and the Western Hemisphere: November 2025

11/3/2025

The Managing Director's Global Policy Agenda, Fall 2025: Navigating a World In Transition

10/16/2025

Taxes in Lithuania: Benchmarking and Policy Options

10/13/2025

Mauritius: Technical Assistance Report-Report on the National Accounts and Balance of Payments Mission (March 24–28, 2025)

10/10/2025

Modernizing Latvia’s Electricity Sector Through Closer EU Integration: Republic of Latvia

10/7/2025