This thesis explores knowledge in the capital openness domain by introducing new concepts of potential capital openness and the efficiency of capital openness and measuring them. Potential capital openness is proposed as a new index of measuring capital openness. The new indices are applied to revisit the evidence on the macroeconomic trilemma theory, and evidence on a dilemma is revealed. This thesis also explores the income distribution effects of capital openness and reveals that outward

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... tal openness exacerbates inequality while inward capital openness reduces inequality. The extent of the income distribution effect varies with the per-capita income level.