- International Monetary Fund
- Published Date:
- April 2007
Cover, Kim Kyung-Hoon/Reuters/Corbis; p. vi, Joe Raedle/Getty; p. 17, Stephen Shaver/UPI; p. 33, You Sung-Ho/Reuters; p. 36, Claro Cortes IV/Reuters; p. 40, Brian Kersey/UPI Newspictures; p. 45, Enrique Marcarian/Reuters; p. 47, Darren Whiteside/Reuters; p. 59, Claro Cotes IV/Reuters; p. 63, Royalty-free/Corbis; p. 69, Mauricio Lima/Agence France Presse; p. 71, Matthias Schrader/Deutsch Presse Agentur; p. 77, Paulo Whitaker/Reuters; pp. 83 and 85, Massoud Etemadi; p. 86, Hoang Dinh Nam/Agence France Presse; p. 88, Reuters.
p. 20, Massoud Etemadi; p. 67, Lai Oy Louie.
© 2007 International Monetary Fund
Jeremy Clift and Elisa Diehl
Production: IMF Multimedia Division, Creative Services
Cover and design: Luisa Menjivar
Composition: Lijun Li, Noel Albizo, and Lai Oy Louie
Published April 2007
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The growing integration of the world economy—one of the main features of globalization—is increasingly affecting the policy choices of IMF member countries. For that reason, Finance & Development magazine has been tracking the trends and consequences of globalization, which refers to the increasing speed and ease with which goods, services, factors of production, the ownership of assets, information, ideas, and consumers themselves move across national borders.
This compilation of articles published over the past eight years in the pages of F&D examines the economic implications of, and responses to, globalization in an era when porous borders limit the domestic effectiveness of many national decisions while causing their effects to be transmitted internationally. As the title suggests, the focus is on financial globalization, including the policy implications of the huge growth in cross-border capital flows. Since 1995, these flows have tripled to $6.4 trillion, reaching about 14.5 percent of world GDP, after 15 years of staying within a relatively narrow range of 2–6 percent. Should the surge in capital swirling around the globe be cause for joy or alarm? Alarm seemed to dominate in the aftermath of the East Asian financial crisis in the late 1990s. But a major reappraisal is now under way of the costs and benefits of these global flows, especially since many developing countries are grappling with the question of whether they should open up more to these flows or use capital controls to resist them.
The compilation is the second to be published by F&D, following the collection of articles on health and development. By publishing the articles together, we hope that they will form a useful starting point for those examining the globalization of finance.
Finance & Development
A new way of looking at financial globalization reexamines its costs and benefits
M. Ayhan Kose, Eswar Prasad, Kenneth Rogoff, and Shang-Jin Wei
M. Ayhan Kose and Eswar Prasad
Mangal Goswami, Jack Ree, and Ina Kota
Is foreign capital associated with economic growth and, if not, why does it flow “uphill”?
Eswar Prasad, Raghuram Rajan, and Arvind Subramanian
Globalization is unsettling for many despite its many benefits
What new data tell us about the external wealth of nations
Philip R. Lane and Gian Maria Milesi-Ferretti
Lessons from India’s gradualist approach to capital account convertibility
Yaga Venugopal Reddy
The lack of a lender of last resort creates a vacuum in the international institutional structure
The implications for financial stability of the sharp rise in international capital flows
Ceyla Pazarbaşloğlu, Mangal Goswami, and Jack Ree
With new forces shaping global capital markets, participants in international finance are well advised to rethink their operating models
Mohamed A. El-Erian
Despite considerable benefits to national economies, financial globalization has changed the structure of their markets
What are the consequences of herdlike behavior?
Eduardo Borensztein and R. Gaston Gelos
What is the future for developing country capital markets in a globalized economy?
Augusto de la Torre and Sergio Schmukler
With tighter links between national economies and global financial markets, better financial analysis is critical to macroeconomic management
Four trends altering the financial world pose challenges for the effective supervision and regulation of the financial sector
Tomás J.T. Baliño and Angel Ubide
An IMF study suggests that opening up to the global economy could help developing countries cope with the adverse effects of volatility on growth
M. Ayhan Kose, Eswar S. Prasad, and Marco E. Terrones
A critical survey of recent studies on trade liberalization
Andrew Berg and Anne Krueger
How has increased participation in international trade affected developing countries economically?
David Dollar and Aart Kraay
How to help developing countries integrate into the global trading system
Point-Counterpoint between Kevin Watkins and David Dollar and Aart Kraay
The numbers do not support the hype over job losses
Mary Amiti and Shang-Jin Wei