The Global Capital Market: Benefactor or Menace?

Maurice Obstfeld

No 1026, Center for International and Development Economics Research, Working Paper Series from Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley

Abstract: This paper reviews the theoretical functions, history, and policy problems raised by the international capital market. The goal is to offer a perspective on both the considerable advantages the market offers and on the genuine hazards it poses, as well as on the avenues through which it constrains national policy choices. A duality of benefits and risks is inescapable in the real world of asymmetric information and imperfect contract enforcement. I argue, however, that in confronting the global capital market there is no reason to depart from conventional economic wisdom. The way to maximize net benefits is to encourage economic integration while attacking concomitant distortions and other unwanted side-effects at, or close to, their sources.

Keywords: international capital market; financial crises; exchange-rate crises; policy autonomy; globalization; economics (search for similar items in EconPapers)
Date: 1998-05-01
Note: oai:cdlib1:iber/cider-1026
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Related works:
Working Paper: The Global Capital Market: Benefactor or Menace? (2000)
Working Paper: The Global Capital Market: Benefactor or Menace? (1998)
Working Paper: The Global Capital Market: Benefactor or Menace? (1998)
Journal Article: The Global Capital Market: Benefactor or Menace? (1998)
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Persistent link: http://EconPapers.repec.org/RePEc:cdl:ciders:1026

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