The Global Capital Market: Benefactor or Menace?

Maurice Obstfeld

Journal of Economic Perspectives, 1998, vol. 12, issue 4, 9-30

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 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. The author argues, however, that, in confronting the global capital market, the way to maximize net benefits is to encourage economic integration while attacking concomitant distortions and unwanted side effects at, or close to, their sources.

JEL-codes: C62 D20 E52 F02 F21 F30 G32 G34 O19 (search for similar items in EconPapers)
Date: 1998
Note: DOI: 10.1257/jep.12.4.9
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Citations: View citations in EconPapers (336)

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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)
Working Paper: The Global Capital Market: Benefactor or Menace? (1998)
Working Paper: The Global Capital Market: Benefactor or Menace? (1998)
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