02367cas a2200265 a 4500 AALejournalIMF018389 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484350898 1018-5941 BD-DhAAL BD-DhAAL Furceri, Davide. The Aggregate and Distributional Effects of Financial Globalization : Evidence from Macro and Sectoral Data / Davide Furceri, Prakash Loungani, Jonathan Ostry. Washington, D.C. : International Monetary Fund, 2018. 1 online resource (61 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We take a fresh look at the aggregate and distributional effects of policies to liberalize international capital flows-financial globalization. Both country- and industry-level results suggest that such policies have led on average to limited output gains while contributing to significant increases in inequality-that is, they pose an equity-efficiency trade-off. Behind this average lies considerable heterogeneity in effects depending on country characteristics. Liberalization increases output in countries with high financial depth and those that avoid financial crises, while distributional effects are more pronounced in countries with low financial depth and inclusion and where liberalization is followed by a crisis. Difference-indifference estimates using sectoral data suggest that liberalization episodes reduce the share of labor income, particularly for industries with higher external financial dependence, those with a higher natural propensity to use layoffs to adjust to idiosyncratic shocks, and those with a higher elasticity of substitution between capital and labor. The sectoral results underpin a causal interpretation of the findings using macro data. Mode of access: Internet Loungani, Prakash. Ostry, Jonathan. IMF Working Papers; Working Paper ; No. 2018/083 Full text available on IMF http://elibrary.imf.org/view/journals/001/2018/083/001.2018.issue-083-en.xml IMF e-Library