Financial Integration and Rebalancing in Asia

Abstract

The paper shows that Asia''s degree of financial integration, both with the world and within the region remains low by various measures. The paper also provides empirical evidence that greater financial integration can support economic rebalancing in statistically meaningful ways. The implication is that in the debate on managing capital inflows the longer-term benefits of financial openness for broader-based growth should not be forgotten.Asia;Capital inflows;Foreign investment;Exchange restrictions;Capital account liberalization;Economic growth;financial integration, portfolio investment, fdi, direct investment, portfolio investment assets, foreign assets, net foreign assets, direct investment inflows, foreign direct investment, international financial, trade intensity, trade integration, international financial integration, financial markets, international settlements, foreign investors, foreign participation, capital flows, equity portfolio investment, foreign asset, global integration, globalization, global financial integration, equity portfolio, exchange rates, foreign currency, international economic policy, financial regulations, equity flows, financial globalization, international financial statistics, global finance, bilateral trade, global financial crisis, economic integration, international investors, medium-sized firms, globalization of production, international financial centers