Getting it Right: What to Reform in International Financial Markets

IADB, Research Department Working Paper No. 428

26 Pages Posted: 8 Aug 2000  

Ricardo Hausmann

Harvard University - Harvard Kennedy School (HKS)

Eduardo Fernandez-Arias

Inter-American Development Bank (IDB)

Multiple version iconThere are 2 versions of this paper

Date Written: August 2000

Abstract

Our review of the main proposals on international financial architecture currently under consideration gives reasons for concern that excessive emphasis on improving stability by impeding capital flows will have a deleterious development impact. Sustainable development requires initiatives addressing the failures of international financial markets that make capital flows so small and volatile. Our analysis identifies a number of alternative initiatives and principles to get them right in connection with official support, private sector participation, and reforms to the institutional framework. However, the fact that some of these efficient reforms entail financial risks to supporting developed countries contributes to lack of consensus.

Keywords: international financial architecture, burdensharing, financial rescue, crisis prevention

JEL Classification: F33, F34, F42

Suggested Citation

Hausmann, Ricardo and Fernandez-Arias, Eduardo, Getting it Right: What to Reform in International Financial Markets (August 2000). IADB, Research Department Working Paper No. 428. Available at SSRN: https://ssrn.com/abstract=238350 or http://dx.doi.org/10.2139/ssrn.238350

Ricardo Hausmann (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Mailbox 34
Cambridge, MA 02138
United States
617-496-3740 (Phone)
617-496-8753 (Fax)

HOME PAGE: http://www.hks.harvard.edu/about/faculty-staff-directory/ricardo-hausmann

Eduardo Fernandez-Arias

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue, NW
Research Department
Washington, DC 20577
United States
202-623-3783 (Phone)
202-623-2481 (Fax)

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