Reaping the Benefits of Financial Globalization

By Giovanni Dell'Ariccia, Paolo Mauro, Andre Faria, Jonathan David Ostry, Julian Di Giovanni, Martin Schindler, Ayhan Kose, Marco Terrones

December 16, 2008

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Format: Chicago

Giovanni Dell'Ariccia, Paolo Mauro, Andre Faria, Jonathan David Ostry, Julian Di Giovanni, Martin Schindler, Ayhan Kose, and Marco Terrones. Reaping the Benefits of Financial Globalization, (USA: International Monetary Fund, 2008) accessed November 8, 2024

Summary

Financial globalization has increased dramatically over the past three decades, particularly for advanced economies, while emerging market and developing countries experienced more moderate increases. Divergences across countries stem from different capital control regimes, and factors such as institutional quality and domestic financial development. Although, in principle, financial globalization should enhance international risk sharing, reduce macroeconomic volatility, and foster economic growth, in practice its effects are less clear-cut. This paper envisages a gradual and orderly sequencing of external financial liberalization and complementary reforms in macroeconomic policy framework as essential components of a successful liberalization strategy.

Subject: Balance of payments, Capital controls, Emerging and frontier financial markets, Financial integration, Financial markets, Financial sector development, Globalization

Keywords: Africa, Asset trade, Capital, Capital controls, Consumption volatility, Control, Country fundamentals, East Asia, Emerging and frontier financial markets, Financial integration, Financial sector development, Global, Inancial globalization, Liberalization, OP, Risk sharing, Volatility

Publication Details

Pages:

52
Volume:

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DOI:

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Issue:

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Series:

Occasional Paper No. 2008/007
Stock No:

S264EA
ISBN:

9781589067486
ISSN:

0251-6365

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