Document Type
Article
Language
eng
Format of Original
18 p.
Publication Date
8-2007
Publisher
United Nations Economic Commission for Europe
Source Publication
United Nations Economic Commission for Europe Discussion Papers Series
Source ISSN
97802302017
Abstract
We estimate the effect of financial openness on economic integration for two clusters of countries: the formerly planned economies of Eastern Europe and central Asia (emerging market economies) and some western advanced economies. We focus on two dimensions of economic integration: convergence of per-capita incomes across countries and trade integration. We employ both single equation estimation and system estimation to account for endogenous links between trade integration and income convergence. Results show that in the cluster of emerging market economies, financial openness is a powerful instrument of economic integration. In the group of advanced economies, financial openness effectively facilitates income convergence, but its impact on trade integration is ambiguous.
Recommended Citation
Carmignani, Fabrizio and Chowdhury, Abdur, "Does Financial Openness Promote Economic Integration?" (2007). Economics Faculty Research and Publications. 72.
https://epublications.marquette.edu/econ_fac/72
Comments
Published version. UNECE Discussion Papers, No. 2007.4 (August 2007). Permalink. © 2007 United Nations Economic Commission for Europe. Used with permission.