italaccountsrequirebothdomesticfinancialliberalizationandexchangerateflexibility.Thispaperadvocatestheoptimallycascadingoffinancialliberalizationthatisconsistentacrossthreedimensions:extentofdomesticfinancialliberalization;thedegreeofexchangerateflexibility;andthescopeofcapitalaccountliberalization..OptimalSequencingUnderoptimalsequencing,liberalizationoccurssequentially.LetAi∈[A,…,An]representtheithofndifferentstagesofdomesticfinancialsectorliberalization.LetBi∈[B,…,Bn]representtheithofndifferentdegreesofexchangerateflexibility.Here,onecanthinkofBasapeggedbilateralexchangerateandBnasafullyfloatingexchangerate.Finally,letCi∈[C,…,Cn]representtheithofndifferentstagesofcapitalaccountliberalization.Astrictinterpretationofoptimalsequencingsuggeststhefollowingconceptualframework:Thatistosay,first,adomesticfinancialsectorlib活性。
本文主张金融自由化最