The impact of capital flow on financial stability ［资本流动对于金融稳定的影响］
Financial development and dynamic investment behavior ［企业的融资约束和投资行为］
The world is just emerging from the worst financial and economic crisis since the Great Depression. While financial variables, such as exchange rates, have stabilized in the world, unemployment remains far higher than before the crisis, and real wages far lower. Previous studies argue that trade policies regarding financial services are an important—but often neglected—determinant of capital flows and financial sector stability. Financial services trade liberalization which promotes the use of a broad spectrum of financial instruments and allows the presence of foreign financial institutions whilst not unduly restricting their business practices, results in less distorted and less volatile capital flows, and promotes financial sector stability.
Our research will focus on the arguments for capital market liberalization, and identifies their theoretical and empirical weaknesses. This provides the foundations for the argument for intervention in short-term capital flow. Our research also concludes with a brief discussion of the various ways in which such interventions may be implemented.