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Economic integration and government revenue from financial repression

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  • Jinjarak, Yothin

Abstract

We study a relationship between economic openness via financial and trade integration and government revenue from financial repression. An implicit budgetary saving, the financial repression revenue, as measured by the stock of government domestic debt multiplied by the difference between effective foreign and domestic interest rate, has declined significantly from the 1980s into the 2000s across the upper-income, the middle-income, and the low-income developing countries. While we find that both the financial and trade openness have a negative association with the financial repression revenue in the panel of countries, the effect of financial openness is stronger and the empirical correlations depend on the quality of governmental and budgetary management.

Suggested Citation

  • Jinjarak, Yothin, 2013. "Economic integration and government revenue from financial repression," Economic Systems, Elsevier, vol. 37(2), pages 271-283.
    • Handle: RePEc:eee:ecosys:v:37:y:2013:i:2:p:271-283
    DOI: 10.1016/j.ecosys.2012.10.003
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    Cited by:

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    3. Nave, Juan M. & Ruiz, Javier, 2015. "Risk aversion and monetary policy in a global context," Journal of Financial Stability, Elsevier, vol. 20(C), pages 14-35.

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    More about this item

    Keywords

    Financial repression; Globalization; Government debt;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • P11 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Planning, Coordination, and Reform

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