Question

Discuss the empirical evidence on the impact of financial liberalisation, which fosters financial integration on the economy.

Answer 1

Liberalisation means the reduction of government policies in the socio-economic and political spheres. The impact of economic liberalization is having major changes in the economy. In the light of the experience of Indian liberalization, let me explain how liberalization has an impact on the economy.With the advent of liberalization in India, government and private sector organizations were allowed to do business with minimal restrictions. Financial hosts were open to foreign companies and investors. The private sector began to gain more importance. Efforts were made to promote foreign trade and to expand the global market in the country. Private companies and multinational corporations in the country were encouraged to invest.

The effect of liberalization has resulted in the free flow of capital. This has resulted in huge growth in agriculture. Employment has increased. Another noteworthy feature was the technological growth. Customers got a discount on products. Demand for domestic goods increased internationally