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Theoretical concepts of financial liberalization

Vol. 25, Iss. 8, AUGUST 2019

Received: 15 May 2019

Received in revised form: 24 June 2019

Accepted: 8 July 2019

Available online: 30 August 2019


JEL Classification: B10, B20, F31, F38, F62, G01

Pages: 1933–1948

Rakov I.D. Financial Research Institute under Ministry of Finance of Russian Federation, Moscow, Russian Federation

Subject The article discusses the theoretical concepts of financial liberalization.
Objectives The research conceptually differentiates economic thoughts as part of financial liberalization, spotlighting its strengths and weaknesses to look into the propagation of external shocks caused by cash flow regulation. I also attempt to find an appropriate solution balancing between cushioning external factors and raising funds for relevant industries.
Methods The methodological underpinning comprises methods of theoretical research, such as the historical method and generalization. I also conducted the analysis and comparison.
Results The findings summarize viewpoints of renown scholars on financial liberalization and the impact it has on national economies, including the spill-over of external shocks through capital flows and foreign exchange rate. The article also outlines the concept of financial liberalization and associates similar concepts with its in accordance with the applicable deregulation tools.
Conclusions and Relevance Reflecting my own attitude to the above process, theoretical research into financial liberalization also provide for a mechanism for redistributing the cash flow among countries and its impact on national economies. Some studies call the State to regulate cross-border cash flows. The findings can be helpful to economists, considering the growing financial instability worldwide to articulate the national economic policy and protect national interests.

Keywords: financial liberalization, cross-border capital flows, economic thought, free floating exchange rate, capital account liberalization


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August 2019