From Worldwide Capital Mobility to International Financial Integration: A Review Essay

George von Furstenberg

Open Economies Review, 1998, vol. 9, issue 1, 53-84

Abstract: To be useful to economists, the definition of worldwide financial integration must refer to its welfare-relevant functions or consequences. What ultimately matters is its contribution to the equalization of current and intertemporal trading opportunities, represented by the cost of financial services, at maximum efficiency levels. Analyzing imperfect financial integration implies identifying the obstacles that prevent such equalization, with a lack of perfect capital mobility being only one of the possible impediments. Focusing on how to achieve international equalization, at least cost, of a broad range of financial services is a necessary change for a literature that has tended to rely on single stock, flow, or price correlations to gauge the degree of financial integration, without viewing it as a continuing microeconomic task with many facets. Copyright Kluwer Academic Publishers 1998

Keywords: international capital mobility; financial integration; financial services (search for similar items in EconPapers)
Date: 1998
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DOI: 10.1023/A:1008227306994

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