Providing economic stability in the conditions of financial openness: change of approaches and conclusions for Ukraine

Abstract

The article summarizes theoretical approaches to substantiate the benefits and risks of financial openness as the scientific basis for shaping economic stability policy. Shown the gaps of the neoliberal approach to financial openness as an exogenous factor of economic growth and its contradiction with classical theory. The author identifies the signs of change in the institutional view of leading IFIs at the global level and the formation of a more rational approach to the introduction of financial openness, which includes the implementation of international capital flows control and management policies. Determined the main factors of the formation of conditions for financial instability in the economy under the influence of the consequences of uncontrolled movement of international capital flows and revival of foreign trade. As a result of the comparison of modern views with the classical origins of the theory of free movement of capital and the analysis of empirical data on the practical impact of financial openness on economic stability, it is substantiated that the modern rational approach is more consistent with the classical origins of the theory of financial integration and the practical needs for stable economic growth. Substantiated the influence of the institutional environment of the financial sector on the benefits of financial and trade openness. Based on the need to ensure stable functioning of Ukraine’s economy, the author outlines the conceptualized principles of the rational advancement of Ukraine’s economy towards financial openness.