Torsten Sløk

Capital Account Liberalization and Economic Performance: Survey and Synthesis

This paper surveys the literature on the effects of capital account openness and stock market liberalization on economic growth and provides a synthesis in which we reconcile some of the different results presented in the literature. Various empirical measures used to gauge the presence of controls on capital account transactions and the liberalization of equity markets are discussed. We compare detailed measures of capital account controls that attempt to capture the intensity of enforcement with other indicators that simply capture whether controls are present. A detailed review of the literature is followed by an empirical section in which we trace the divergence in published results to differences in country coverage, sample periods, indicators of liberalization, and control variables across studies. Specifically, we show that when an institutional variable such as government reputation is added to the specification, the significance of capital account openness vanishes. Also, we demonstrate that enriching the specification by allowing for nonlinearities helps explain why different studies that ignore the nonlinear nature of the relationship find different results.

Interpreting Real Exchange Rate Movements in Transition Countries

В течение последнего десятилетия в некоторых странах с переходной экономикой наблюдалось значительное укрепление реального курса национальной валюты. В данной статье проверяется следующая гипотеза - укрепление курса является следствием роста производительности в секторе торгуемых благ. Используя панельные данные за период 1993-1998 гг., авторы показали, что в странах Центральной и Восточной Европы, а также странах Балтии укрепление действительно можно объяснить ростом производительности. Авторы полагают, что по мере развития переходные экономики будут испытают еще большее укрепление курса. Однако это укрепление не должно негативно отражаться на международной конкурентоспособности, поскольку является всего лишь сдвигом равновесия в результате роста производительности.

The Relationship between Stock Prices, House Prices and Consumption in OECD Countries

This paper analyzes the relationship between stock prices, house prices and consumption using data for 16 OECD countries. The panel data analysis suggests that the long-run responsiveness of consumption to permanent changes in stock prices is higher for countries with a market-based financial system than for countries with a bank-based financial system. Splitting the sample into the 1980s and 1990s further shows an increased sensitivity in the 1990s of consumption to permanent changes in stock prices for both countries with bank-based financial systems as well as countries with market-based financial systems. The relationship between changes in consumption and changes in house prices is positive for the second sample period across all specifications and financial systems.

The Impact of Changes in Stock Prices and House Priceson Consumption in OECD Countries

This paper quantifies the different impact of stock and house prices on consumption using data for 16 OECD countries. The analysis finds that the long-run impact of an increase in stock prices and house prices is in general higher in countries with a market-based financial system. The sensitivity of consumption to changes in stock wealth is about twice as large as the sensitivity to changes in housing wealth. Splitting the sample into the 1980s and 1990s shows that both countries with a market-based financial system and countries with a bank-based financial system moved toward a higher degree of responsiveness of consumption to changes in stock prices and house prices.

Regulation of Financial Systems and Economic Growth

This paper examines whether regulation that is more conducive to competitive and efficient financial systems has a significant positive impact on sectoral output and productivity growth in a sample of 25 OECD countries. More specifically, following a methodology used by Rajan and Zingales (1998), the paper tests whether industries that depend more heavily on external sources of funding tend to grow faster in countries that have more competition-friendly regulation in markets for banking services and financial instruments. The regulatory indicators are assembled from surveys conducted by the World Bank on regulations in banking and securities markets. They point to substantial variations in the stance of regulation across countries, in particular with respect to the broad rules underpinning securities market transactions. The empirical analysis indicates that financial system regulation matters for output growth both in a statistical and economic sense.

Monetary Policy in Transition; The Case of Mongolia

This paper analyzes monetary policy in transition. It examines the dynamics of monetary policy in Mongolia using granger-causality tests for monetary variables and inflation. The paper also analyzes money demand using data from 22 Mongolian regions during 1993-1998. The analyses confirm the key role of monetary policy in stabilization and reveal that even in a transition economy as rudimentary as Mongolia, a stable money demand and a predictable relationship between inflation and monetary variables do exist. Hence market-based monetary policy is effective. In addition, the analysis points to a difference between transition and industrial economies in the elasticity of money demand with respect to activity, reflecting the larger role for transactions demand for money.

Réglementation des systèmes financiers et croissance économique dans les pays de l'OCDE

A partir dun echantillon de 25 pays de lOCDE, nous nous efforcons de determiner dans cette etude dans quelle mesure une reglementation favorisant un fonctionnement concurrentiel et efficient des systemes financiers a un effet positif significatif sur la croissance de la productivite et de la production dans differents secteurs. Plus precisement, suivant une approche utilisee par Rajan et Zingales (1998), nous verifions si les secteurs qui sont plus tributaires de sources de financement externes tendent a se developper plus rapidement dans les pays dont la reglementation favorise davantage la concurrence sur les marches des services bancaires et des instruments financiers. Les indicateurs de reglementation utilises sont elabores a partir dinformations recueillies par la Banque mondiale sur la reglementation des marches de services bancaires et de valeurs mobilieres. Ils mettent en lumiere des variations sensibles de reglementation entre pays, en particulier en ce qui concerne les regles de base relatives aux transactions sur valeurs mobilieres. Lanalyse empirique realisee indique que la reglementation des systemes financiers influe de maniere significative sur la croissance de la production, a la fois au sens statistique et economique.