Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/244322 
Year of Publication: 
2021
Series/Report no.: 
Working Paper No. 2021-19
Publisher: 
Federal Reserve Bank of Atlanta, Atlanta, GA
Abstract: 
Using a novel database of domestic financial reforms in 90 countries from 1973 to 2014, we document that global financial liberalization followed an S-curve path: reforms were slow and gradual in early periods, accelerated during the 1990s, and slowed down after 2000. We estimate a learning model that explains these dynamics. Policymakers updated their beliefs about the growth effects of financial reforms by learning from their own and other countries' experiences. Positive growth surprises in advanced economies helped accelerate belief updating worldwide, leading to the global wave of financial liberalization in the 1990s. The 2008 financial crisis, however, caused significant belief reversals.
Subjects: 
financial reforms
informational diffusion
cross-country learning
belief updating
S-curve evolution
political costs
economic growth
financial crisis
JEL: 
O11
O50
C11
C54
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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