International Capital Mobility

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International Capital Mobility

“Globalization is today's reality. Like it or not, the move to a world economy is a fact of life. At some point in the 1990s the process achieved critical mass and people started to sit up and take notice. Many were apprehensive.

Today, almost all of us are aware that our lives are being shaped by an interconnected world economy of cross-border flows of trade, finance and technology. In our hearts, we know that there is no going back.”

-Maria Livanos Cattaui, Secretary General of the International Chamber of Commerce.

As evidenced by the above quotation, any analysis of the central economic issues

of our time is incomplete without a clear understanding of the increasing

interconnectedness among nations. Globalization and integration are two very potent and monumental forces that are rapidly transforming not only the way individuals and

governments conduct business, but the nature of the modern world itself. Nations’

economies interact on a level unforeseen a century ago, consequently rendering

isolationism no longer possible. The ties that bind are growing tighter and economic

phenomena are transcending the local to have worldwide implications. It is therefore

imperative for today’s observer of economic events to be knowledgeable about the greater picture surpassing the regional. In this regard, there is no greater subject to begin studying than global finance.

The international financial system is a phenomenon of vast importance that has

demonstrated its power in fueling large amounts of economic growth. Many extol its

virtues, citing the massive gains in productivity it channels. Others, however, harbor

misgivings and claim...

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...ld Economic Crisis,” New Republic April 17, 2000.

7 Paul Krugman, “Capital Control Freaks,” Slate/The Dismal Science September 28, 1999.

8 Paul Krugman, “Capital Control Freaks.”

9 J. Bradford DeLong

10 Robert Krol, “The Case for Open Global Capital Markets,” Cato Trade Briefing Paper: March 15, 2001.

11 Robert Krol

12 Robert Krol

13 Robert Krol

14 Robert Krol

15 Robert Krol

16 Robert Krol

17 Lawrence H. White, “Asia Needs Capital Controls? It Just Ain’t So!” Freeman March, 1999.

18 Lawrence H. White 19 Anna J. Schwartz, “International Financial Crises: Myths and Realities” Cato Journal , Winter 1998: 251-256

20 Lawrence H. White

21 David F. DeRosa, In Defense of Free Capital Markets: The Case Against a New

International Financial Architecture, (Princeton: Bloomberg Press, 2001) xiv.

22 DeRosa xiv.

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