Structural Reforms and Economic Performance in Advanced and Developing Countries

By Jonathan David Ostry, Alessandro Prati, Antonio Spilimbergo

October 15, 2009

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Jonathan David Ostry, Alessandro Prati, and Antonio Spilimbergo. Structural Reforms and Economic Performance in Advanced and Developing Countries, (USA: International Monetary Fund, 2009) accessed December 3, 2024

Summary

This volume examines the impact on economic performance of structural policies-policies that increase the role of market forces and competition in the economy, while maintaining appropriate regulatory frameworks. The results reflect a new dataset covering reforms of domestic product markets, international trade, the domestic financial sector, and the external capital account, in 91 developed and developing countries. Among the key results of this study, the authors find that real and financial reforms (and, in particular, domestic financial liberalization, trade liberalization, and agricultural liberalization) boost income growth. However, growth effects differ significantly across alternative reform sequencing strategies: a trade-before-capital-account strategy achieves better outcomes than the reverse, or even than a "big bang"; also, liberalizing the domestic financial sector together with the external capital account is growth-enhancing, provided the economy is relatively open to international trade. Finally, relatively liberalized domestic financial sectors enhance the economy's resilience, reducing output costs from adverse terms-of-trade and interest-rate shocks; increased credit availability is one of the key mechanisms.

Subject: Balance of payments, Banking, Capital account liberalization, Current account, Economic sectors, Financial regulation and supervision, Financial sector, Financial sector reform, Macrostructural analysis, Structural reforms

Keywords: Capital account liberalization, Central and Eastern Europe, Current account, East Asia, Economy, Farm sector liberalization, Financial sector, Financial sector reform, Global, Growth benefit, Liberalization, Liberalization index, OP, Stability benefit, Structural reforms, Trade liberalization index

Publication Details

Pages:

60
Volume:

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DOI:

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Issue:

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Series:

Occasional Paper No. 2009/003
Stock No:

S268EA
ISBN:

9781589068186
ISSN:

0251-6365

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