The Global Capital Market: Benefactor or Menace?

Maurice Obstfeld

International Finance from EconWPA

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.

JEL-codes: F31 F41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fmk
Date: 2000-04-04
Note: 41 pages Adobe.pdf
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http://129.3.20.41/eps/if/papers/0004/0004001.pdf (application/pdf)

Related works:
Working Paper: The Global Capital Market: Benefactor or Menace? (1998)
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:wpa:wuwpif:0004001

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