Globalization, Capital Flows, and International Regulation
Levy Economics Institute WP #161
Posted: 3 Jul 1997
Date Written: May 1996
In the post-war period prior to 1990 policy proposals aimed at reducing the instabilities associated with increased capital flows focused on increasing market efficiencies so that nominal variables would reflect real conditions in the economy. However, those in charge of financial resource flows applied theories largely unconcerned with fundamentals, resulting in such financial market instabilities as volatility in the foreign exchange market. Andrew Cornford, of the Global Interdependence Division of UNCTAD, and Jan Kregel, of the University of Bologna, examine the policies of the post-war period and the reasons for their failure to produce economic stability. They then explore the means by which instability might be reduced.
JEL Classification: F33, F34, N10, N20
Suggested Citation: Suggested Citation