Globalization of Financial Markets and Implications for Pacific Basin Developing Countries

By David John Goldsbrough, Ranjit S Teja

March 1, 1991

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David John Goldsbrough, and Ranjit S Teja. Globalization of Financial Markets and Implications for Pacific Basin Developing Countries, (USA: International Monetary Fund, 1991) accessed November 8, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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.

Subject: Balance of payments, Capital flows, Current account, Current account balance, Current account deficits, Financial services, Real interest rates

Keywords: Australia and New Zealand, Capital flows, Credit rationing, Current account, Current account balance, Current account deficits, Equilibrium interest rate, Financial market integration, Government saving, Gross investment, Interest rate, Investment data, Nominal exchange rate, Rate of return, Real interest rates, World interest rates, WP

Publication Details

Pages:

28
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1991/034
Stock No:

WPIEA0341991
ISBN:

9781451978780
ISSN:

1018-5941

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