Book review: Rajib Bhattacharyya (Ed.), The Gains and Pains of Integration and Trade Liberalization: Lessons from Emerging Economies

Date01 November 2021
Publication Date01 November 2021
AuthorRanajoy Bhattacharyya
SubjectBook Review
Book Review
Rajib Bhattacharyya (Ed.), The Gains and Pains of Integration and
Trade Liberalization: Lessons from Emerging Economies. UK: Emerald
Publishing, 2020, $105, 296 pp. ISBN: 9781838670047.
The benefits and drawbacks of globalisation have been a much debated topic in
economics since the last decade of the twentieth century. Some of the main
questions debated include, does globalisation affect economic growth? Does it
increase income inequality? Does it increase volatility of output? What are the
differential impacts of the different aspects of globalisation such as financial
integration and trade liberalisation? Do the positive (or negative) effects of
globalisation depend on the level of development of countries and on the level of
income of individuals within countries? In spite of all the attention however, there
have been no consensus among economists on the pros and cons of economic
liberalisation. This book contributes in this field by bringing together a series of
mostly empirical papers on the gains and pitfalls of globalisation in different
countries across the globe. There is a clear bias on one particular aspect of
globalisation: financial integration. A small number of papers also analyse other
aspects of globalisation such as trade liberalisation, political risk, enhanced
digitisation through foreign direct investment and the growth–inequality nexus.
Financial liberalisation, in the form of liberalisation of the capital account of
the balance of payments leading to lower frictions in the movements of foreign
direct and portfolio investment as well as integration of the domestic financial
system to foreign participation are studied. Most of the sample countries are
emerging economies that have been successful in embarking upon the path of
economic growth in varying degrees. The dominant result in most of the countries
is that financial liberalisation has affected economic growth positively at the cost
of higher volatility and exchange rate pass through to inflation. However the
chapters are not unanimous on the link between economic growth and financial
liberalisation. For example, in chapter 2 the causal link is not established between
per capita income and financial liberalisation in Brazil and India. While in
chapter 5, the link is not observed for gross domestic product and financial
liberalisation in 30 emerging economies.
Other important aspects of financial liberalisation are also pointed out. For
example, the success in implementation of such kind of liberalisation depend
fundamentally on the existing level of financial development of the domestic
economy (chapters 11, 12). Higher the level of financial development, higher is
Foreign Trade Review
56(4) 491–492, 2021
© 2021 Indian Institute of
Foreign Trade
Reprints and permissions:
DOI: 10.1177/00157325211031073

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