Managing Financial Globalization: Insights from the Recent Literature / Shang-Jin Wei.

Format:

Book

Author/Creator:

Wei, Shang-Jin.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w24330.

NBER working paper series no. w24330

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Managing Financial Globalization

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

This paper seeks to draw lessons for developing countries based on a survey of the recent literature on financial globalization. First, while capital account openness holds promises (by potentially lowering cost of capital, promoting risk sharing, and providing disciplines on policies), it does not always work out that way in the data. Distortions in the domestic financial market, international capital market, domestic labor market, and domestic public governance can all make financial globalization less beneficial for developing countries. Second, developing countries may seek to avoid the effects of foreign monetary policy shocks. The empirical pattern appears to be somewhere between a trilemma and a dilemma. While nominal exchange rate flexibility provides some policy autonomy but not consistently, capital flow management can confer additional insulation against foreign monetary shocks.

Notes:

Print version record

February 2018.