Asia and Pacific > Thailand
Abstract
This study provides a candid, systematic, and critical review of recent evidence on this complex subject. Based on a review of the literature and some new empirical evidence, it finds that (1) in spite of an apparently strong theoretical presumption, it is difficult to detect a strong and robust causal relationship between financial integration and economic growth; (2) contrary to theoretical predictions, financial integration appears to be associated with increases in consumption volatility (both in absolute terms and relative to income volatility) in many developing countries; and (3) there appear to be threshold effects in both of these relationships, which may be related to absorptive capacity. Some recent evidence suggests that sound macroeconomic frameworks and, in particular, good governance are both quantitatively and qualitatively important in affecting developing countries’ experiences with financial globalization.
Abstract
This paper explains various challenges posed by the new global economy for the IMF. The urgent tasks of restoring stability to crisis-ridden countries have been accompanied by other more far-reaching questions. The five speeches included in this collection cover a broad range of activities and thinking over the past year. The themes range from immediate crisis management to the broad questions of a new architecture for the global economy; and from the specific concerns of individual countries and regions to the conditions for a strong and equitable world economy. One of the speeches, delivered in September 1998, steps back from prevailing worldwide market turbulence, seeking lessons from the crises, and stressing that conditions vary extensively among emerging economies. Clear, calm analysis is essential by market participants to differentiate among economies. Another speech sets out initial thoughts not just on the key elements of a new financial architecture, however, also on the role that can be played by each constituency in the world economy.