Globalization and financial instability

Helmut Wagner

International Journal of Social Economics, 2005, vol. 32, issue 7, 616-638

Abstract: Purpose - The paper analyses the challenges of globalization for exchange rate and monetary policy. Design/methodology/approach - It first deals with the implications of globalization for the choice of an appropriate exchange rate regime. Then it discusses different strategic aspects of monetary policy in the light of globalization. Finally, it examines the effect of globalization on inflation and the implications of this for the focus on monetary policy. Findings - The main challenge of globalization for exchange rate policy refers to the choice of an appropriate exchange rate regime. Exchange rate policy is constrained by the financial instability tendency effect of globalization insofar as intermediate exchange rate regimes tend to be very unstable. However, globalization may also create the desire to change the focus of monetary policy. Globalization is sometimes argued to reduce inflationary pressures and therefore to “ease” the job of central banks. However, there are caveats with this conclusion or arguments that are discussed in this paper. Originality/value - The paper gives an innovative overview of the various challenges of globalization for monetary policy.

Keywords: Globalization; Inflation; Capital flows; Monetary policy; Error analysis; Economic forecasting (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ijsepp:03068290510601144

DOI: 10.1108/03068290510601144

Access Statistics for this article

International Journal of Social Economics is currently edited by Professor Terence Garrett

More articles in International Journal of Social Economics from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().