This book presents an economic survey of international capital mobility from the late
nineteenth century to the present. The authors examine the theory and empirical evidence
surrounding the fall and rise of integration in the world market. A discussion of
institutional developments focuses on capital controls and the pursuit of macroeconomic
policy objectives in shifting monetary regimes. The Great Depression emerges as the key
turning point in recent history of international capital markets, and offers important
insights for contemporary policy debates. Its principal legacy is that today's return to a
world of global capital is marked by great unevenness in outcomes regarding both risks and
rewards of capital market integration. More than in the past, foreign investment flows
largely from rich countries to other rich countries. Yet most financial crises afflict
developing countries, with costs for everyone.
- Most succinct, up-to-date analysis available of global capital markets, hot
topic
- Senior author, world-class scholar, internationally renowned
- Rich in historical perspective, clearly written, no math, just figures and tables
Contents
Part I. Preamble: 1. Global capital markets: overview and origins: 1.1 Theoretical
benefits; 1.2 Problems of supernational capital markets in practice; 1.3 The emergence of
world capital markets; 1.4 The trilemma: capital mobility, the exchange rate, and monetary
policy; Part II. Global Capital in Modern Historical Perspective: 2. Globalization in
capital markets: quantity evidence: 2.1 The stocks of foreign capital; 2.2 The size of
international flows; 2.3 The saving-investment relationship; 2.4 Caveats: quantity
criteria; 3. Globalization in capital markets: price evidence: 3.1 Real interest rate
convergence; 3.2 Exchange-risk free nominal interest parity; 3.3 Purchasing power parity;
3.4 Caveats: price criteria; 3.5 Summary; Part III. The Political Economy of Capital
Mobility: 4. Globalization in capital markets: a long-run narrative: 4.1 Capital without
constraints: the gold standard, 1870-1931; 4.2 Crisis and compromise: depression and war,
1931-46; 4.3 Containment then collapse: Bretton Woods, 1946-71; 4.4 Crisis and compromise
II: the floating era, 1971-99; 4.5 Measuring financial integration using data on legal
restrictions; 5. The trilemma in history: 5.1 Methodology; 5.2 Data sources; 5.3
Stationarity of nominal interest rates; 5.4 Empirical findings: pooled annual differences;
5.5 Empirical findings: individual-country dynamics; 5.6 Conclusion; 6. Sovereign risk,
credibility, and the gold standard: 6.1 Five suggestive cases; 6.2 Econometric analysis;
6.3 Conclusion; Part IV. Lessons for Today: 7. Uneven rewards: 7.1 Foreign capital stocks:
net versus gross; 7.2 Foreign capital flows: rich versus poor; 7.3 Foreign capital stocks:
rich versus poor; 7.4 Then: has foreign capital always been biased to the rich?; 7.5 Now:
have poor countries really liberalized their markets?; 7.6 Variations in the types of
capital flows; 7.7 Summary; 8. Uneven risks: 8.1 Open markets, crises, and volatility; 8.2
Crises, controls and economic performance; 8.3 Contagion and self-fulfilling crises; 8.4
Market failure, government failure, and policy choices.
376 pages Paperback