The objective of this paper is to in-depth study the financial liberalization process in the various segments of the emerging-market economies and observe whether the resulting assertion of fast-clip real GDP growth holds. The author examines financial and macroeconomic turbulence in the emerging market economies during the 1990s and early 2000s, which gave a new perspective to the financial liberalization process. It was believed that capital account liberalization led to volatility in the capital market as well as macroeconomic volatility, which in turn led to a support for the strategy of restrictive global capital flows. The unrestricted trans-border capital flows were blamed for disorderly, if on occasion totally erratic, capital market behavior, both domestically and globally. After taking a long-term perspective on financial repression and financial liberalization, the author focuses on the liberalization-growth nexus. Capital account liberalization and whether it leads to growth and/or volatility or both are the issues are the next point of analyses. Relatively recent phenomenon of liberalization in equity markets, its pace and intensity, has also been delved into. Whether the recent spate of emerging-market crises bore a relationship with the financial liberalization is the other focus of this paper.

JEL Classification: F02, F21, F32, F36