"Financial integration without a proper set of preconditions might lead to few growth benefits and more output and consumption volatility." (Prasad, Rogoff, Wei, and Kose, 2003) Discuss.
This can be identified by Capital account liberalization (CAL) as well as Actual capital flows
(ACF). It is important to note that one does not ultimately require the other although in many industrialized countries i.e. western countries there is evidence of both ACF and CAL. It is a generally accepted fact that financial integration has increased over the last few decades both in developed and developing nations with capital account restrictions been lifted in many countries (Lane and Milesi-Ferretti, 2003)... displayed 300 characters
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It is a generally accepted fact that financial integration has increased over the last few decades both in developed and developing nations with capital account restrictions been lifted in many countries (Lane and Milesi-Ferretti, 2003).
The question states that increased financial integration can, without the proper pre condition in place, lead to increased volatility... displayed 300 characters
