Capital Account Openness And Its Economic Growth Effect Analysis

Since the 1980 s,economic integration and financial liberalization appear all over the world and international relationships have become tighter.With the development of modern communication technology,international capital flow quickly and frequently.Some countries also have benefited from the global optimization of the distribution of resources and deepening of financial cooperation by opening capital account.However,since the 1990 s,Asian financial crisis and American subprime mortgage crisis broke out.The international economic and financial instability caused by the capital account openness is gradually revealed.The capital account openness' s positive and negative effects on the economic growth are more concerned by domestic and foreign scholars.As the world's second largest economy,China has already taken the pace of opening capital account.From the initial encouragement of foreign direct investment to the implementation of the qualified domestic and foreign investors system and RMB enters the SDR basket,so the degree of capital account openness is improving day by day.At present China has entered a critical period of the financial system reform and economic structure adjustment,therefore China's capital account opening is vital both to international and domestic society.This paper is under the disputation of capital account openness' s impact on economic growth as well as based on the specific situation of China and tries to measure China's capital account openness and do the related empirical analysis.Firstly,this paper uses the improved ratio index to estimate China's capital account openness from 1982 to 2016,which fully reflects the development process and policy arrangement of China's capital account openness.Secondly,introduces the capital account openness and its square as the core control variables to build an econometric model and perform the empirical analysis.Moreover,it is concluded that the China's capital account openness and economic growth present an inverted u-shaped relationship.Finally,according to the full thesis we come up with four policy suggestions: strengthen the financial system deepening reform,guide the high quality and effective cross-border capital flows,insist on the "positively progressive" open capital account policy and establish the macro-prudential regulation system under the global capital flows.