Growth and welfare impact of financial integration: Evidence from emerging and developing economies

Asif Saeed, Gulasekaran Rajaguru, Ahmed Khalid

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

This study computes time varying welfare gains of international capital flows for more financially integrated economies (MFIs) and less financially integrated economies (LFIs). Literature commonly calculates welfare gains at a point in time based on optimal savings model. This study contributes in the literature by calculating country wise welfare gains depending on respective macroeconomic conditions. It constructs four alternative series of welfare calculations for 22 MFIs and 29 LFIs for the period 1961-2010. We find welfare gains for the MFIs which range from 0.76% to 3.2% of permanent increase in consumption. Similarly, this range varies from 0.5% to 5.2% for LFIs. Furthermore, the results show that welfare gains are sensitive to changes in time preference rates, capital share in output, depreciation rates and total factor productivity growth. In addition to existing findings, we contribute by highlighting the significance of time series perspective of welfare gains.
Original languageEnglish
Number of pages63
Publication statusPublished - 2016
Event2016 Australasia Meeting of the Econometrics Society - Sydney, Australia
Duration: 5 Jul 20168 Jul 2016

Conference

Conference2016 Australasia Meeting of the Econometrics Society
CountryAustralia
CitySydney
Period5/07/168/07/16

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Integrated
Developing economies
Emerging economies
Welfare gains
Financial integration
International capital flows
Savings
Depreciation
Time-varying
Time preference
Macroeconomic conditions
Total factor productivity growth

Cite this

Saeed, A., Rajaguru, G., & Khalid, A. (2016). Growth and welfare impact of financial integration: Evidence from emerging and developing economies. Paper presented at 2016 Australasia Meeting of the Econometrics Society, Sydney, Australia.
Saeed, Asif ; Rajaguru, Gulasekaran ; Khalid, Ahmed. / Growth and welfare impact of financial integration : Evidence from emerging and developing economies. Paper presented at 2016 Australasia Meeting of the Econometrics Society, Sydney, Australia.63 p.
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Saeed, A, Rajaguru, G & Khalid, A 2016, 'Growth and welfare impact of financial integration: Evidence from emerging and developing economies' Paper presented at 2016 Australasia Meeting of the Econometrics Society, Sydney, Australia, 5/07/16 - 8/07/16, .

Growth and welfare impact of financial integration : Evidence from emerging and developing economies. / Saeed, Asif; Rajaguru, Gulasekaran; Khalid, Ahmed.

2016. Paper presented at 2016 Australasia Meeting of the Econometrics Society, Sydney, Australia.

Research output: Contribution to conferencePaperResearchpeer-review

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AU - Khalid, Ahmed

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M3 - Paper

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Saeed A, Rajaguru G, Khalid A. Growth and welfare impact of financial integration: Evidence from emerging and developing economies. 2016. Paper presented at 2016 Australasia Meeting of the Econometrics Society, Sydney, Australia.