Globalization, Macroeconomic Performance, and the Exchange Rates of Emerging Economies

Maurice Obstfeld

No 10849, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Among the developing countries of the world, those emerging markets that have sought some degree of integration into world finance are characterized by higher per capita incomes, higher long-run growth rates, and lower output and consumption volatility. These characteristics are more likely to be causes than effects of financial integration. The measurable gains from financial integration appear to be lower for emerging markets than for higher-income countries, and appear to have been limited by recent crises. One factor limiting the gains from financial integration is the difficulty emerging economies face in resolving the open-economy trilemma. Given their structural and institutional features, many emerging economies cannot live comfortably either with fixed or with freely floating exchange rates. Most recently, the exchange rates of several emerging countries display attempts at stabilization punctuated by high volatility in periods of market stress.

JEL-codes: O11 O16 F34 F36 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-ifn and nep-mac
Date: 2004-10
Note: IFM
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Working Paper: Globalization, Macroeconomic Performance, and the Exchange Rates of Emerging Economies (2004)
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