Although theory suggests that the real exchange rate should depreciate after a credible trade liberalization but could appreciate temporarily with a noncredible one, little empirical evidence exists. Unlike existing studies that use either indirect tests or unreliable openness measures, this...

Beginning in 1985 Italy embarked on a path of progressive removal of its system of controls on portfolio investment, a process formally completed with the abolition of all remaining restrictions in 1990. In this paper we review this policy of capital liberalization and integrate the analysis...

This paper examines the key characteristics of foreign exchange intervention by the Reserve Bank of Australia in the period 1983-1997. The effectiveness of intervention has come into question in view of the rapidly growing volume of trade in the markets. In the literature, tests of actual...