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Financial Liberalization, Property Rights, and Growth in an Overlapping‐Generations Model

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  • Giorgio Bellettini
  • Carlotta Berti Ceroni

Abstract

Using an endogenous growth model in which countries differ with respect to property rights protection, the paper analyzes the growth and welfare effects of removing capital controls, and studies the political support for a reform which improves the quality of property rights. When these are poorly protected, liberalization of capital movements may foster growth in the short run but eliminates it in the long run. The removal of capital controls may benefit agents at the time of liberalization, hurting future generations. Ceteris paribus, political support for a reform of property rights is stronger in the closed than in the open economy.

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  • Giorgio Bellettini & Carlotta Berti Ceroni, 2000. "Financial Liberalization, Property Rights, and Growth in an Overlapping‐Generations Model," Review of International Economics, Wiley Blackwell, vol. 8(2), pages 348-359, May.
    • Handle: RePEc:bla:reviec:v:8:y:2000:i:2:p:348-359
    DOI: 10.1111/1467-9396.00226
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    3. Keefer, Philip & Knack, Stephen, 2002. "Boondoogles and expropriation : rent-sseking and policy distortion when property rights are insecure," Policy Research Working Paper Series 2910, The World Bank.

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