Liberalization Of Capital Movements Research Articles

Vergiden Kaçınmayı Önlemeye Yönelik Küresel Asgari Kurumlar Vergisi

1980 sonrası liberalleşme politikalarının uygulanmaya başlaması ile birlikte küreselleşme süreci de hız kazanmıştır. Sermaye hareketlerinin serbestleşmesi, sermayenin vergi oranlarına duyarlılığında yaşanan artış ile vergi bir rekabet unsuru haline gelmiş ve vergi cenneti ülkelerin ortaya çıkmasına neden olmuştur. Vergi cenneti ülkeleri aracılığıyla vergiden kaçınma eğilimleri kolaylaşmış ve ulus devletler gelir kaybı yaşamaya başlamıştır. Özellikle 2008 mali krizinin ekonomi üzerindeki olumsuz etkileri, artan dış borçlar, bütçe açıkları hükümetleri kemer sıkma politikalarına yöneltmiştir. Şirketler ise vergi yükümlülüklerini en aza indirmek için vergiden kaçınma faaliyetlerine yönelmiştir. Kurumlar vergisinden kaçınmayı önlemek amacıyla Amerika Birleşik Devletleri önderliğinde G7 ülkeleri tarafından çok uluslu şirketlerin kazançlarının kazancın elde edildiği ülkede vergilendirilmesine yönelik küresel asgari kurumlar vergisi oranı önerisinde bulunulmuştur. Çok uluslu işletmelerin elde ettikleri kazançların elde edildiği ülkelerde vergilendirilmesine yönelik çalışmaya küresel gayri safi hasılanın %90’ından fazlasına sahip ülkelerin oluşturduğu 137 ülkenin katılımı sağlanmıştır. Çalışmanın 2023 yılı itibariyle uygulamaya konulması planlanmaktadır. Yüzde on beş oranında uygulanacak olan küresel asgari kurumlar vergisi ile küresel çapta yıllık 150 milyar USD dolar ek kurumlar vergisi geliri elde edilmesi öngörülmektedir. Ayrıca uygulama ile uluslararası vergi sisteminin istikrarına ilaveten, mükellef ve vergi idareleri açısından vergide belirliliğin artmasına katkı sağlanması amaçlanmaktadır.

Modern Approach to Formation of the Banking Sector Development Trajectory

The results of the study topical issue on effective development of the banking sector with an emphasis on banks with domestic capital are summarized in the article; the modern approach to formatting the trajectory of such development is substantiated. The factors influencing the development of the banking sector are systematized. External and internal factors are distinguished. The supranational and national levels are defined for the group of external factors. Supranational factors are related to globalization and integration. First of all, these are crisis phenomena in the world economy and financial system, the liberalization of capital movements. External factors at the national level mostly have a negative impact on the development of the banking sector. It is shown that certain external factors of the national level depend on supranational ones, and internal factors depend on national ones. Internal factors are grouped into those that have a positive and negative impact on the development of the banking sector. The characteristic of the most significant factors is given, their mutual influence is shown. Factors such as the dangerous level of competitive internalization due to the presence of foreign banks in the Ukrainian banking market, the high level of loans and deposits dollarization, low quality of assets and loans have a negative impact on the development of the banking sector. The influence of internal factors on the development of the banking sector is determined. It is proved using dynamic (simulation) modeling based on an impulse process that the development of the banking sector is significantly influenced by the factor of dangerous level of competitive internalization. It is established that such stabilizing factors as the growth of demand for banking services, increasing confidence in the banking system and stabilization of the national currency together compensate for the destabilizing effect of any negative factor, including competitive internalization. The formation of positive internal factors will contribute to the progressive trajectory of the banking sector development, in particular banks with domestic capital.

An evaluation on inflation in Turkey after 1980 and the analysis of relationship between inflation, interest rate and exchange rate

Purpose - Interest and exchange rates were determined by market dynamics after adaption of export-oriented industrialization model and liberalization of capital movements in Turkey after 1980s. Important steps have been taken by the Central Bank of Turkey to improve the effectiveness of monetary policy and the execution of monetary and exchange rate policies compatible with free market conditions. However, Turkey experienced chronically high inflation due to the crisis and political imbalances. In this study, the causality relationship between inflation, interest rate and exchange rate is evaluated. Methodology - The relationship between inflation, interest rates and exchange rate are investigated by VAR Method for 2003: 01-2015: 02. The causality relationship between the variables are investigated by Granger causality analysis. Then, by impulse response analysis the responses of the variables to one-unit shocks and by variance decomposition analysis the explanatory of the variables on each other are investigated. Findings- After 2008 global crisis, by 2010, the Central Bank adopted financial stability as well as price stability in monetary policy implementations. It is necessary to re-analyze the relationship between inflation, exchange rate and interest rate due to the changes in implementations against inflation during this period. The causality relationship between variables are examined by Granger causality test. As a result, a causality relationship from the interest rate to inflation is determined. Conclusion- In this study the relationship between inflation, interest rate and exchange rate is examined in Turkey for 2005-2016 period. Findings of analysis result that interest rate is an effective variable on inflation and inflation rate is mostly affected by fluctuations in interest rates. Interest rates can be used as a policy tool against inflation which was the case for Turkey in the near past.

G-7 ve E-7 Ülkelerinde Hisse Senedi Fiyat Endeksleri ile Makro İktisadi Değişkenler Arasındaki ilişki - Relationship between Stock Price Indices and Macroeconomic Variables in G-7 and E-7 Countries

The liberalization of capital movements under the influence of globalization has played an important role in determining international economic relations. At this point, stock markets, which are important instruments of capital markets, have become prominent among other instruments in financial markets. Equities are affected by the globalization process and the effects of stock markets on macroeconomic dynamics provide further understanding on the process of economic development. In this study, the relationship between macroeconomic factors and stock indices both in advanced and emerging market economies are analyzed. In the study, G-7 countries and E-7 countries were evaluated and heterogeneous panel estimators were used.Real effective exchange rate index, M2 money supply, inflation, interest rate, industrial production index, and consumer and business confidence indices are used as macroeconomic variables. The findings of the analyses indicate that there are no statistically significant correlations between stock indices, business confidence index and M2 money supply in G-7 countries; while there are statistically significant correlations among other variables. As for E-7 countries, the results were statistically significant only between real effective exchange rate and stock indices. There were not any statistically significant correlations between other variables. As a result of the analyses regarding these two country groups in the given time span, it is proved that the stock markets of G-7 countries are more bound to the macroeconomic variables and their capital markets are deeper than E-7 countries. E-7 countries have more shallow stock markets. Overall, the results of the study suggest that macroeconomic factors in E-7 countries do not seem to be viable indicators for the stock markets.

EXPORTS, FOREIGN DIRECT INVESTMENTS AND ECONOMIC GROWTH IN THE REPUBLIC OF CROATIA // IZVOZ, INOZEMNA IZRAVNA ULAGANJA I EKONOMSKI RAST U REPUBLICI HRVATSKOJ

Economic growth, export and foreign direct investment have been an important research subject for many years. The argument about the role of export as one of the main deterministic factors of economic growth has its roots in classical trade theories. Furthermore, according to the neoclassical theory, long-term economic growth is the consequence of an increase in exogenous factors such as increased labor force or technological progress. The export-led growth strategy of a country aims to provide incentives for the export of goods through various economic policy measures. Its goal is to increase the production of goods and services that can compete in the global market, use advanced technology and provide foreign exchange revenue needed to import capital goods. The emergence of new theoretical models that emphasize the importance of endogenous factors for economic growth has enabled the inclusion of foreign direct investment into analysis as one of growth determinants. Free movement of capital in the past was recorded only in a few countries and several sectors, and usually the capital flows followed the trade flows. Today there is a noticeable global trend of proliferation of free movement of capital. What is more, foreign direct investments have gained importance as desirable source of capital, especially in developing countries among which a strong competition for attracting such investments has developed. Foreign direct investments represent a specific form of capital because they imply a long-term interest as well as a certain share of ownership that ensures voting rights and participation in the management of the company. There is a vast literature dealing with the effects of foreign direct investment on the recipient country. It is generally accepted that these effects positively contribute to economic growth and development due to the inflow of fresh capital and spillover effects that depend on the absorption capacity of the recipient country. In conclusion, it is to be expected that liberalization of international trade and export performance, as well as the liberalization of capital movements and the inflow of foreign direct investment have a positive impact on the economic growth of a country. The aim of this paper is to examine the correlation between export, foreign direct investments and economic growth on the example of the Republic of Croatia. The conclusions of the research are of use in adopting appropriate policies and strategies for the growth and development of small open economies such as the Republic of Croatia.

Economic Globalization, Inequality, Social Safety Nets, and the Size and Scope of Government in East and Southeast Asia

Economic globalization, or economic integration and the liberalization of capital movements across national boundaries, or openness, has been linked to income inequality between and within nations. Using an empirical study of countries within East and Southeast Asia, I establish a general theory about open economies and their relationship to social safety nets and hence bigger and more powerful governments, contrary to the conventional wisdom. This approach was instrumental in determining why some open economies have larger social safety nets, but not necessarily larger governments than less open economies and, conversely, why other open economies have smaller social safety nets and larger governments than less open economies. The nature of the economic/political system was determinative of the degree, timing, and kind of measures taken by governments to alleviate inequality, as well as the size and scope of government, not the degree of openness.

Accounting Measures to be taken for the enterprises in difficulty during times of economic crisis: A study on small and medium-sized enterprises (SMEs)

After the liberalization of capital movements, Turkish Economy went through a crisis in 1994. The process ended up with the International Monetary Fund (IMF) stability program and the stand-by arrangement with the IMF after the financial crises on November 2000 and February 2001. The reason for the financial crisis that intensified in October 2008 in the United States of America (USA) was the low-income housing policy of the US government. In connection with the global crisis, there has been an economic recession in Turkey towards the end of 2008 and unemployment rate has increased rapidly albeit the economic stimulus packages proposed. Despite a leastwise stability in Turkish markets, the socioeconomic outcomes of the crisis have become more serious. While those events in economy impacted upon the whole business world, small enterprises had great difficulties. Especially the ones that were taking debt in foreign currency went bankrupt. This paper examines the accounting measures to be taken for the enterprises, especially the SMEs, in difficulty during times of economic crisis. A survey was conducted in order to evaluate the SMEs’ perspectives on accounting measures and the obtained data were subjected to statistical analysis. In accordance with the results, it was observed that the SMEs focused on the measures that accelerate cash flow and save cost. Key words: Economic crisis, struggle against the crisis, failure, accounting measures.

Free Movement of Capital between EU Member States and Third Countries: How Far Has the Door Been Closed?

Among the many recent developments in European tax law that are worthwhile being highlighted and debated, there is one area that is of very high relevance in legal practice but has taken some twists and turns in the European Court of Justice’s (ECJ’s) case law, which have left both academics and practitioners in a state of confusion, and that is the scope of the free movement of capital in relation to non-EU countries. As a matter of fact, the problem has already been existing since 1 January 1994, the day on which the new provisions of the EC Treaty on capital movements entered into force (originally Article 73(a)–73(h) in the Maastricht version; now Articles 56–60). Not only did this step make the 1988 Directive on the liberalization of capital movements largely redundant for intra-EU situations between Member States, but it also reached beyond the EU’s outer frontiers, since Article 56(1) EC explicitly prohibits ‘all restrictions on the movement of capital between Member States and between Member States and third countries’.

The Russian forex market: Moving toward world standards

Russian foreign exchange statistics have some unique features regarding the calculation of metrics describing market size and structure. Every three years, there is an opportunity for comparing forex markets in different countries, when the Bank for International Settlements (further, BIS) issues a report, “Foreign Exchange and Derivatives Market Activity,” which describes key indicators and trends of the global forex market. Thanks to its latest report, published in September 2007 [1], one can assess the consequences of liberalization of the Russian foreign market and to determine the extent to which its trends match global ones. Comparisons with BIS statistics as a whole and with individual countries will show how close Russia, aspiring to the full convertibility of the ruble, has come to world standards not only in terms of liberalization of capital movements but the forex market size, structure, and technologies.

National Labour Markets, International Factor Mobility and Macroeconomic Instability

We analyze how global economic integration of factor markets affects the stability of the macroeconomy, with respect to expectations-driven fluctuations, when countries differ in their labor market institutions. It is shown that, due to the occurrence of equilibrium indeterminacy, liberalization of capital movements is likely to be accompanied by persistent fluctuations at the world level, while allowing also for labor movements may bring macroeconomic stability. Whether this also implies higher welfare in the long run depends on differentials in average firm size across countries. If the average firm size in a country operating under perfect competition and full employment is small relative to a country with rigid wages and unemployment, then free migration reduces unemployment, narrows wage differentials and expands world output.

Imperialism in the Neoliberal Era: Argentina’s Reprieve and Crisis

The Argentinean crisis in the late 1990s and early 2000s was another manifestation of various “neoliberal crises” that struck Latin America, Asia, Turkey, and Russia. During the 1990s, Argentina underwent typical neoliberal reforms: further opening of trade, liberalization of capital movements, convertibility, pension funds, and so on in the general context of large public and external debt rendered unbearable by interest rates’ rise in 1979. As in other countries, these trends were the expression of this new social order’s strong bias to the advantage of central and peripheral ruling classes. The Argentinean crisis also owes much to the stand taken by its ruling classes in their attempt to insert themselves under favorable conditions within the new configuration of imperialism. The national economy was sold to international transnational corporations and financial interests, while national ruling classes finance accumulation in the United States. Postcrisis trends manifest the difficulty to define a new strategy.

A Monetary Union in Asia? Some European Lessons

Monetary Union in Europe has been the natural response to the combined desire of stabilizing intra-European exchange rates and of lifting permanently all capital controls. The commitment to stable exchange rate has long been rooted in policymakers' conviction that trade integration requires precise rules which eliminate the risk of misalignments, whether imposed by the markets or arranged by the authorities. The success in maintaining fixed-but-adjustable exchange rates within the EMS and next in adopting a single currency is largely due to the patient and progressive building institutions that became the uneasy repository of those parts of national sovereignty that have been abandoned. This experience suggests three lessons for current discussions about a monetary union in Asia. First, multilateral regional exchange rate arrangements are more conducive to an effective defense than indirect approaches like basket pegs. They probably require some limits to capital mobility. Second, adopting a single currency necessitates elaborate preparations that can only be underpinned by the gradual build up of collective institutions. Third, a monetaryMonetary Union in Europe has been the natural response to the combined desire of stabilizing intra-European exchange rates and of lifting permanently all capital controls. The commitment to stable exchange rate has long been rooted in policymakers' conviction that trade integration requires precise rules which eliminate the risk of misalignments, whether imposed by the markets or arranged by the authorities. The success in maintaining fixed-but-adjustable exchange rates within the EMS and next in adopting a single currency is largely due to the patient and progressive building institutions that became the uneasy repository of those parts of national sovereignty that have been abandoned. This experience suggests three lessons for current discussions about a monetary union in Asia. First, multilateral regional exchange rate arrangements are more conducive to an effective defense than indirect approaches like basket pegs. They probably require some limits to capital mobility. Second, adopting a single currency necessitates elaborate preparations that can only be underpinned by the gradual build up of collective institutions. Third, a monetary union requires some reasonable degree of real convergence. This implies starting with a core of sufficiently homogeneous countries. At this stage, starting with a monetary union in Asia would imply reversing the European sequencing, which started with a common market, moved on to the EMS, and liberalization of capital movements.

A Comparative Literature Survey of Islamic Finance and Banking

There has been large‐scale growth in Islamic finance and banking in Muslim countries and around the world during the last twenty years. This growth is influenced by factors including the introduction of broad macroeconomic and structural reforms in financial systems, the liberalization of capital movements, privatization, the global integration of financial markets, and the introduction of innovative and new Islamic products. Islamic finance is now reaching new levels of sophistication. However, a complete Islamic financial system with its identifiable instruments and markets is still very much at an early stage of evolution. Many problems and challenges relating to Islamic instruments, financial markets, and regulations must be addressed and resolved. In this paper, we provide a comprehensive comparative review of the literature on the Islamic financial system. Specifically, we discuss the basic features of the Islamic finance and banking. We also introduce Islamic financial instruments in order to compare them to existing Western financial instruments and discuss the legal problems that investors in these instruments may encounter. The paper also gives a preliminary empirical assessment of the performance of Islamic banking and finance, and highlights the regulations, challenges and problems in the Islamic banking market.

A Monetary Union in Asia? Some European Lessons

Monetary Union in Europe has been the natural response to the combined desire of stabilizing intra-European exchange rates and of lifting permanently all capital controls. The commitment to stable exchange rate has long been rooted in policymakers’ conviction that trade integration requires precise rules which eliminate the risk of misalignments, whether imposed by the markets or arranged by the authorities. The success in maintaining fixed-but-adjustable exchange rates within the EMS and next in adopting a single currency is largely due to the patient and progressive building institutions that became the uneasy repository of those parts of national sovereignty that have been abandoned. This experience suggests three lessons for current discussions about a monetary union in Asia. First, multilateral regional exchange rate arrangements are more conducive to an effective defense than indirect approaches like basket pegs. They probably require some limits to capital mobility. Second, adopting a single currency necessitates elaborate preparations that can only be underpinned by the gradual build up of collective institutions. Third, a monetary union requires some reasonable degree of real convergence. This implies starting with a core of sufficiently homogeneous countries. At this stage, starting with a monetary union in Asia would imply reversing the European sequencing, which started with a common market, moved on to the EMS, and liberalization of capital movements.

A Comparative Literature Survey of Islamic Finance and Banking

There has been large-scale growth in Islamic finance and banking in Muslim countries and around the world during the last twenty years. This growth is influenced by factors including the introduction of broad macroeconomic and structural reforms in financial systems, the liberalization of capital movements, privatization, the global integration of financial markets, and the introduction of innovative and new Islamic products. Islamic finance is now reaching new levels of sophistication. However, a complete Islamic financial system with its identifiable instruments and markets is still very much at an early stage of evolution. Many problems and challenges relating to Islamic instruments, financial markets, and regulations must be addressed and resolved. In this paper, we provide a comprehensive comparative review of the literature on the Islamic financial system. Specifically, we discuss the basic features of the Islamic finance and banking. We also introduce Islamic financial instruments in order to compare them to existing Western financial instruments and discuss the legal problems that investors in these instruments may encounter. The paper also gives a preliminary empirical assessment of the performance of Islamic banking and finance, and highlights the regulations, challenges and problems in the Islamic banking market.

Financial Liberalization, Property Rights, and Growth in an Overlapping‐Generations Model

Using an endogenous growth model in which countries differ with respect to property rights protection, the paper analyzes the growth and welfare effects of removing capital controls, and studies the political support for a reform which improves the quality of property rights. When these are poorly protected, liberalization of capital movements may foster growth in the short run but eliminates it in the long run. The removal of capital controls may benefit agents at the time of liberalization, hurting future generations. Ceteris paribus, political support for a reform of property rights is stronger in the closed than in the open economy.

On the efficiency and equity trade-off

The concept of policy measures that create a potential Pareto improvement has dominated normative economics. The use of this concept in welfare economics relies on the availability of discriminatory lump-sum transfers in such a way that the implementation of the efficient policy measure leads to a Pareto movement in the economy. However, most studies of efficient policies preclude by assumption the existence of lump-sum taxation. This paper proposes, in economies amenable to Gorman aggregation, one simple methodology to rank alternative allocations in terms of their distributional implications, in a world with no lump-sum transfers. This methodology is simple because it is independent of the distribution of characteristics in the economy. Then, for a specific policy measure, it can be easily identified whether it implies an equity-efficiency trade-off. The method is illustrated by analyzing the effects on inequality of the elimination of capital taxation, the reduction of the inflation tax, and the liberalization of capital movements in a small open economy.

Selected transition and Mediterranean countries: an institutional primer on EMU and EU accession

The paper examines the institutional channels through which Economic and Monetary Union (EMU) in the European Union (EU) can affect the transition countries of Central and Eastern Europe and three Mediterranean countries that aspire to join the EU.After describing the current institutional framework for relations between the EU and these countries, the paper considers two categories of institutional implications of EMU. The first stems from the need to satisfy the Maastricht convergence criteria before joining the euro area. Although the Maastricht criteria are not accession criteria, many of the countries reviewed are already formulating their macroeconomic policies in a way that will facilitate convergence toward the Maastricht targets. The second implication stems from the need to adopt the EU’s institutional and legal provisions in the area of EMU, such as those referring to the establishment of independent central banks, the prohibition of central bank financing of the government and the liberalization of capital movements. Finally, the paper discusses some of the key policy issues that EMU raises for the countries reviewed, in particular regarding exchange rate policy, capital account liberalization and the possible conflict between growth‐enhancing measures and the Maastricht criteria.

Banking System, International Investors and Central Bank Policy

This paper studies the lending process in financial systems dominated by banks and examines the role of expectations and fundamentals in explaining banking and balance-of-payments crises. The excessive credit expansion to unprofitable projects that often follows the liberalization of capital movements is explained by a soft budget constraint distortion, due to the large availability of funds at low cost in the early phase of the financial liberalization. Insolvent banks default when the interest rate at which international investors offer deposits becomes so high that it is no longer convenient to renew loans to insolvent projects. In this case, the central bank intervenes printing money and validates international investors' expectations of depreciation, which made the cost of funds rise. However, incomplete information about the type of projects financed by the banking system may lead to crises with very similar dynamics, even if banks are just illiquid, because a temporary increase in the cost of funds may drive illiquid banks to insolvency. This mechanism explains contagion among countries that are equally rated by international investors, but have different investment opportunities. Finally, the implications of different institutional arrangements for financial stability are taken into account. In particular, I find that the main source of soft-budget constraint problems in emerging markets is the lack of lenders and that this problem may arise, even if the central bank does not offer guarantees on deposits.

Trade in Financial Services and Capital Movements

International financial liberalization may alter saving-investment imbalances and patterns of capital flows across countries. In a panel of OECD countries for 1990-96, this study examines how the liberalization of capital movements and financial services trade affects net private capital flows. Capital inflows tend to fall (rise) with the liberalization of commercial presence in banking and securities (insurance) services, possibly reflecting an increase (decrease) in saving. Capital account liberalization is found to stimulate capital inflows, suggesting that better access to external financing helps sustain larger fiscal and current account deficits. When cross-border trade is liberalized, capital flows change insignificantly.