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This study analyzes the size, behavior, and responsible factors behind the balance of payments (BOP) problems in Afghanistan from 2004 to 2020. Since the impact of the real indicators on the BOP of Afghanistan still remains unexplored, this article comprehensively analyzes the primary responsible factors for the BOP problems in Afghanistan. First, a comprehensive critical analysis of the BOP and its components is performed. Second, the autoregressive distributed lag (ARDL) model is conducted to empirically scrutinize the influence of fiscal policy variables like government spending (GEX), tax on international trade (TIT), external debt (EXD), and GDP on the BOP. The empirical results revealed that GDP has a significantly positive impact on Afghanistan's BOP in the long run, whereas the influence of GEX on the BOP is significantly negative. Furthermore, it was found that TIT and EXD have insignificant association with BOP. Although there is a meaningful convergence towards long-run equilibrium with an adjustment speed of 94.95% in each period, none of the covariates has a significant effect on the BOP in the short run. Furthermore, the Granger causality test exposed a bidirectional causality between GEX and BOP and a one-way causation from GDP to BOP. The study recommends structural changes in the economy to increase domestic production and improvements in the composition and direction of exports and imports, redirect government spending in favor of domestic producers, and source external debt with improved debt conditions. [ABSTRACT FROM AUTHOR]

The sensitive role played by domestic interest rate in the economy has made studies on its determinants paramount. This study therefore used the autoregressive distributed lag (ARDL) bounds framework to investigate the impact of financial openness on domestic interest rate in Nigeria over the period from 1980–2020. The study included three de facto financial openness measures, namely: foreign direct investment (FDI) inflows, FDI outflows and portfolio investment as well as one de jure financial openness measure, namely: capital account openness. The short-run results revealed that while FDI inflows had a negative but non-significant impact on domestic interest rate, the impact of FDI outflows was positive and significant. The short-run results also indicated that while foreign portfolio investment had a positive but non-significant impact on domestic interest rate, the impact of capital account openness was positive and significant. In the long-run, the study revealed that FDI inflows had a negative but non-significant impact on domestic interest rate. In another vein, while FDI outflows was found to impact on domestic interest rate positively, the impact of capital account openness was also found to be positive. The study therefore concludes that domestic interest rate in Nigeria was influenced positively by both FDI outflows and capital account openness in the two time horizons and this has implications for monetary policy setting. Based on these findings, the study recommends that apart from the traditional policies used in the control of domestic interest rate, monetary authorities in Nigeria should also regulate capital outflows in their quest to direct interest rate to a desired direction.

This study investigates the nexus between India's current and capital accounts using threshold cointegration and asymmetric error-correction approaches. The results validate the threshold cointegration between the current account (CA) and India's capital account (KA). The asymmetric error correction-based results support the unidirectional Granger causality from KA to CA. Further, results reveal that KA's cumulative sum of positive and negative deviation substantially impacts the CA. Finally, results of equilibrium adjustment path asymmetric effect from CA to KA suggest that KA reverts to equilibrium in the short run when CA decreases. [ABSTRACT FROM AUTHOR]

Purpose: The relationship between capital account liberalization and economic growth has been a fervently discussed subject among economists and policy-makers. The role of institutions is imperious to comprehensively investigate the impact of financial openness on growth. The objective of the study is to inspect the nexus between financial liberalization and economic growth after incorporating the contribution of institutional quality. Methodology: A panel of data on 17 emerging market economies (EMEs) is used for the period 1995-2019. We employ the GMM technique by using different de facto and de jure measures of financial liberalization along with institutional variables. Findings: The empirical results illustrate that better quality institutions strengthen the connection between capital account liberalization and output growth in the emerging World. Implications: The policymakers should focus on the more beneficial nature of financial liberalization such as FDI. Also, the policy should be aiming at availing the services of efficient human resources with proper institutional infrastructure.

Bu çalışmada Türkiye’de cari işlemler hesabı ile finans hesabı ve cari işlemler hesabı ile finans hesabının bileşenleri arasındaki nedensellik ilişkisi 1998:Q1- 2018:Q2 dönemi için Toda-Yamamoto nedensellik analizi ile incelenmektedir. Ampirik bulgular, finans hesabından cari işlemler hesabına doğru tek yönlü bir nedensellik ilişkisi olduğunu ortaya koymaktadır. Finans hesabının bileşenleri ile cari işlemler hesabı arasındaki nedensellik ilişkisine bakıldığında ise bulgular farklılaşmakta; finans hesabını oluşturan sermaye akımlarından portföy yatırımları ile kısa vadeli sermaye akımlarından cari işlemler hesabına doğru tek yönlü bir nedensellik ilişkisi mevcutken, cari işlemler hesabından doğrudan yatırımlar ile diğer uzun vadeli sermaye akımlarına doğru ise tek yönlü bir nedensellik ilişkisi olduğu tespit edilmiştir.

It is generally believed that the liberalization of the capital account causes many crises due to its volatility. Given the relative 'immaturity' of Serbia's financial market, additional caution is needed in capital liberalization and the careful management of large capital flows. In conditions of structural mismatch and high indebtedness, the opening of the capital account required careful attention and delicate moves of the economic policy makers. Systemic liberalization of Serbia's capital account begins with political changes in 2000. The political economy plays an important role in forming sufficient support for liberalization. This paper deals with measures taken to establish control over capital flows. It also analyzes the movement of sub-accounts of the balance of payments on which the quantity of capital assets is registered.

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In the present scenario of globalization, India is getting more integrated with the global economy. The balance of payment (BOP) is the method to which countries use to monitor all international monetary transactions to determine how much money is going in and out of a country. Therefore, the present study is conducted to analyze the trend of BOP of India for the period of 15 years, that is, from 2004-2005 to 2018-2019. The result shows that trade balance and current account of India's BOP generate deficit for the entire study period. On the other hand, capital account of India's BOP shows a surplus which is a positive indicator for the economic health of the country. In addition, the overall BOP of India is favorable in all the years except 2008-2009, 2011-2012, and 2018-2019. The study suggests that exports should be promoted and imports should be discouraged. [ABSTRACT FROM AUTHOR]

This paper investigates the effects of structural reforms on real per capita GDP in the short and long-run by employing Pooled Mean Group approach. I find that during the period 1973–2006, there is a positive long-run relationship between international trade reform, financial (capital account, and domestic finance) reforms and real per capita GDP. My results also indicate that in the short-run, financially more open economies suffer more from international trade and domestic financial reforms. More importantly, the adverse effects of reforms in the short-run can be mitigated by improving property rights and contract enforcement. [ABSTRACT FROM AUTHOR]

Price stability is considered an essential component of macroeconomic management of an economy because the higher inflation rate is harmful for various sectors of the country. The main objective of this paper is to investigate the dynamics of inflation in presence of capital account liberalization and the institutional quality variables for Pakistan. The study covers the time period of 1984 to 2015 and employs the ARDL estimation technique to estimate three different specifications based on trade liberalization and the institutional quality measures. The longrun and short-run estimates of different specifications reveal that the model which incorporates the institutional quality measures along with the capital account liberalization index can best explain the inflationary process in. Moreover, growth rate of money supply and the real effective exchange rate are proved significant contributors of inflation; whereas, capital account liberalization, trade openness, per capita GDP and the institutional quality index are helpful in reducing inflation in the country. The study suggest that along with opening of capital account, the government should also ensure stability of institutional quality measures, such as law and order, democratic accountability, transparency and the government stability to control inflation rate in the economy. Furthermore, the policy makers should take proper cautionary measures for controlling growth rate of money supply. [ABSTRACT FROM AUTHOR]