Capital Account Liberalization

Capital account liberalization involves reducing restrictions on the flow of money for investment and financial transactions across a country's borders. It allows individuals and businesses to buy and sell assets, such as stocks, bonds, and real estate, freely across countries. The goal is to attract foreign investment, foster economic growth, and increase financial efficiency. However, it also exposes economies to greater risks from volatile capital movements and financial crises. Proper implementation and regulation are essential to balance the benefits of openness with the need for financial stability.