Financial Globalization : Unequal Blessings
The authors present a framework to analyze financial globalization. They argue that financial globalization needs to take into account the relation between money (particularly in its role as store of value), asset and factor price flexibility, and...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2002/10/2031709/financial-globalization-unequal-blessings http://hdl.handle.net/10986/19230 |
| Summary: | The authors present a framework to
analyze financial globalization. They argue that financial
globalization needs to take into account the relation
between money (particularly in its role as store of value),
asset and factor price flexibility, and contractual and
regulatory institutions. Countries that have the
"blessed trinity" (international currency,
flexible exchange rate regime, and sound contractual and
regulatory environment) can integrate successfully into the
world financial markets. But developing countries normally
display the "unblessed trinity" (weak currency,
fear of floating, and weak institutional framework). The
authors define and discuss two alternative avenues (a
"dollar trinity" and a "peso trinity")
for developing countries to safely embrace international
financial integration while the blessed trinity remains
beyond reach. |
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