Working Paper: NBER ID: w9164
Authors: Hali J. Edison; Ross Levine; Luca Ricci; Torsten Sløk
Abstract: This paper uses new data and new econometric techniques to investigate the impact of international financial integration on economic growth and also to assess whether this relationship depends on the level of economic development, financial development, legal system development, government corruption, and macroeconomic policies. Using a wide array of measures of international financial integration on 57 countries and an assortment of statistical methodologies, we are unable to reject the null hypothesis that international financial integration does not accelerate economic growth even when controlling for particular economic, financial, institutional, and policy characteristics.
Keywords: international financial integration; economic growth; capital flows; institutions; macroeconomic policies
JEL Codes: F3; O4; O16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| International Financial Integration (IFI) (F30) | Economic Growth (O49) |
| International Financial Integration (IFI) + Institutional Quality (F30) | Economic Growth (O49) |
| Institutional Quality (L15) | Economic Growth (O49) |