Title: Does Financial Liberalization Influence Saving, Investment and Economic Growth? Evidence From 25 Emerging Market Economies, 1973–96
Abstract: During the past two decades, many countries have reformed their domestic financial markets. In many cases, these reforms were triggered by both domestic and international developments. Domestically, many government policies that focused on controlling financial markets — known in the literature as financial repression — became increasingly criticized, for it was felt that these policies were blocking the efficient functioning and development of financial institutions. The idea that stagnating economic growth and economic crisis were related to financial repression policies has gained ground since the early 1970s (McKinnon 1973, Shaw 1973).1 Internationally, the globalization of markets, including financial markets, also put pressure on governments to reconsider financial market controls.