Globalization of Financial Markets and Implications for Pacific Basin Developing Countries
Summary:
This paper analyzes the consequences of the growing interdependence of world financial markets for Pacific developing countries. Section I discusses trends in financial integration in the Pacific and the underlying movements in saving and investment. Section II seeks to quantify the increased capital mobility, in terms of rate of return differentials and the degree of correlation between savings and investment rates across countries. Section III focuses on policy implications of increasing integration, including the effectiveness of macroeconomic policy instruments, the usefulness of the current account as a target of policy, and the dangers of excessive taxation of financial intermediation.
Series:
Working Paper No. 1991/034
Subject:
Balance of payments Capital flows Current account Current account balance Current account deficits Financial services Real interest rates
English
Publication Date:
March 1, 1991
ISBN/ISSN:
9781451978780/1018-5941
Stock No:
WPIEA0341991
Pages:
28
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