Financial Openness and the Dutch Disease

• Published in: Review of development economics Vol. 15; no. 3; pp. 556 - 568
• Main Author: Lartey, Emmanuel K. K.
• Format: Journal Article
• Language: English
• Published: Oxford, UK Blackwell Publishing Ltd 01.08.2011
• Subjects: Capital movement; Developing countries; Development economics; Disclosure; Economic theory; Foreign exchange rates; Foreign investment; LDCs; Studies

This paper studies the relationship between the degree of financial openness and Dutch disease effects of capital inflows in developing countries. The results reveal that an increase in financial openness leads to an appreciation of the real exchange rate. In particular, the study shows that an incr...