Financial Globalization

Abstract: The paper studies how global financial markets can be restructured so as to be more stable while also providing some national economic autonomy. An impossibility theorem sets the stage for the analysis of reform alternatives. Then, the relative merits of alternative exchange rate regimes and of different degrees of capital-market-flow regulation are considered. The paper concludes by opting for a  combination of : floating exchange rate; slowing down and taxing foreign capital inflows; and greater national economic sovereignty.

Financial Globalization.pdf