We address three related questions concerning financial liberalization in a small open economy. Does financial … liberalization and the resulting capital inflow improve production efficiency in the domestic economy? Who benefits from financial … liberalization in the long run and in the short run? Should financial liberalization be implemented gradually or hastily? Our main …

cannot be ruled out. The paper recommends financial liberalization in the form of lower reserve requirements for economies … markets, intermediate good imports, capital mobility and flexible exchange rates. The analysis shows that financial … liberalization, in the form of increased rate of interest on deposits and tight monetary policy causes deflation for an economy with …

analyze the price- and output- effects of financial liberalization. The analysis shows that financial deregulation, in the …

convertibility. The analysis shows that the effect of financial liberalization on rate of inflation and the movements of the nominal …

financial liberalization, in the form of an increased rate of interest on deposits and tight monetary policy, unambiguously and …

-performing loans and public capital injections, particularly in the four largest state-owned banks; (ii) financial liberalization, with … financial liberalization. Bank recapitalization, however, needs to be accompanied by a radical improvement in corporate …