The Impact Of Financial Openness On The Sudden Disruption Of International Capital Flows

Since the 1990 s,with the continuous development of world economic and financial integration,the international capital flow shows a trend: the scale is growing and the volatility is growing too,as a result,the influence of international capital flow shocks that many countries,which is becoming bigger and bigger.When the impact reaches a certain scale,the capital flow was named "sudden stop",it can cause huge impact on a country's economy,increase the instability of the financial system.It is characterised with high frequency and deep damagement and infection,so this phenomenon has aroused wide attention of economists and policy makers.Since the 1970 s,whether developing countries or developed countries,they are all on the path of the financial liberalization,hoping that financial liberalization could optimize resource allocation and dispersive financial risk,promote the financial development and economic growth.But so far,the effect of the financial liberalization practice is not very desirable,on the one hand,financial openness does help the developing countries with the development of the economy,on the other hand,financial opening may bring the financial risks of other countries get into the country through the financial opening,and due to the frequent attacks of the international financial crisis,and the occurence trend of developing countries,the financial liberalization in the different countries have different degrees of backsliding.This article is based on the basic theory of financial openness and sudden stop and spatial econometrics and is built on the impact of financial openness on sudden stop with spatial panel data model,studies the financial open to international capital flows.the conclusion may be helpful for the design of the open policy,the state formulates relevant policies and related policy execution time sequence has the certain reference significance.In this paper,the research shows that: the "sudden stop" happens with two reasons,the inner reason and the outer reason,the inner reason is the country itself,the outter reason is the relation of the country to the other countrys.As the inner reason,with the increase of financial openness,the possibility of a country is interrupted suddenly increased first,and when the degree of financial openness and then continue to increase,the possibility of sudden interruption occurred but will decreases,presents the comparison between the U shape.As the outer reason,a country's financial open will affect the neighboring countries,show some spillover effects.In this paper,the design of the research on financial opening-up has certain guidance function,the research conclusion is helpful to formulate related policies and to determine the timing of the policy implementation in order to provide the corresponding theoretical basis and empirical support.This article has five parts,the first part is the introduction,the research background,research purpose,significance,research contents,methods,structure and technical route,points out the general research context and structure;The second part is the literature review and the related theory,points out the existing problems,the innovation and improvement.At the same time this article introduced the financial openness,sudden stop,and the spatial panel model and other related theories;The third part aims at the impact of financial openness on sudden stop,the theoretical analysis and related model,introduces the theories on the impact of financial openness on sudden stop,and raising the spatial panel model;The fourth part is the financial openness affect on the sudden stop,the part of this chapter is the content of the study design,narrates the general process of empirical and instructions,and then puts forward the impact of financial openness on sudden stop with the spatial panel data model,index selection,data preprocessing,model and hypothesis test,and then the results are analyzed and summarized.The fifth part :conclusion and follow-up studies suggest,which is based on the results of the part of the summary of the research purpose,according to the shortcomings of this paper,a possible solution of follow-up studies.This article is based on the basic theory of financial openness?sudden stop and spatial econometrics and mainly studies the impact of financial openness on sudden stop financial crisis with spatial panel data model,studies the financial openness influence on sudden stop,and the conclusion on the state formulates relevant policies and related policy execution time sequence may have certain reference significance.