Year: 1998
Type: report
Abstract: This paper reviews the theoretical functions, history, and policy problems raised by the international capital market.The goal is to offer a perspective on both the considerable advantages the market offers and on the genuine hazards it poses, as well as on the avenues through which it constrains national policy choices.A duality of benefits and risks is inescapable in the real world of asymmetric information and imperfect contract enforcement.I argue, however, that in confronting the global capital market there is no reason to depart from conventional economic wisdom.The way to maximize net benefits is to encourage economic integration while attacking concomitant distortions and other unwanted side-effects at, or close to, their sources.
DOI: 10.3386/w6559
Author: Maurice Obstfeld
Institution: University of California, Berkeley
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
Funder: National Science Foundation
OpenAlex ID: W3123719552