Correlation Analysis Of Capital Account Liberalization And Economic Growth

Since the last nineties, economists have been dedicating efforts on the research of the relationship between capital account liberalization under a number of variables, such as economic growth, total factor productivities, income distribution, domestic investment and inflation, etc. Among all these factors, the relationship between capital account liberalization and economic growth is the most frequently discussed, however, the economists haven't reached a consensus on this topic. This article mainly analyzes the relationship between capital account liberalization and economic growth, the different impacts of capital account liberalization on both developed and developing countries, and the effects of all kinds of capital flows on economic growth.This article first of all reviews the theoretic basis of capital account liberalization, elaborating the role of foreign investment in economic development. Recent empirical studies on the relativity of capital account liberalization and economic are also reviewed, summarizing both the results and methodologies of econometric research which leads to the solution to the problems by use of econometric estimate model. In the end, the degree of openness of China's capital account and the current situation of foreign investment in China were drawn into focus with a detailed analysis of its mode and selective sequence. Based on the above discussion, the influences of opening capital account of China were summarized and strategies proposed. This article comes to the conclusion by analyzing the model that capital account liberalization always plays a positive role in economic growth; and increased capital flows, both FDI and other forms of private capital, have benefited global economic growth even in developing countries.