Globalization, Financial Market Opening, and Foreign Capital Inflows

M.J. Fry

Working Papers from University of Birmingham - International Financial Group

Abstract: Recent events in some European countries might suggest that increased capital inflows inevitably appreciate the real exchange rate and increase financial fragility. Hence, opening domestic financial markets to international investors seems a perilous undertaking. If autarky is rejected, however, countries have little choice but to permit capital to flow across their borders. The first section of the paper examines some specific issues involved in opening domestic financial markets to foreign investors. The second section analyzes the effects of capiutal inflows on real exchange rates.

Keywords: INTERNATIONAL; ECONOMY (search for similar items in EconPapers)
JEL-codes: F30 (search for similar items in EconPapers)
Pages: 60 pages
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:fth:birmif:97-03

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