The globalization of finance

Article Abstract:

Advances in telecommunications and computer technology have increased the flow of goods and services within a country, and among different countries. This globalization of trading activities has created a parallel demand for global financing services. The latter has enhanced international allocation of capital and widespread distribution of financing risks. However, the countries' financial interdependence also increases the risk of an economic crises of global intensity, such as what happened in Asia. It is, therefore, imperative for the governments to adopt healthy macroeconomic policies.

Risk (Economics), Economic policy, Capital market, Capital markets, International trade

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International financial crises: myths and realities

Article Abstract:

Concerns have been raised on the possibility that the economic crisis in a specific country would spread out to other countries and trigger a global crisis. Such fears have been the basis of bail-out policies, wherein financially well-off countries provide huge emergency financing to the endangered economy. The former condition is unlikely as countries no longer use the gold standard which caused the currency crisis of 1931. Rather, they have shifted to the floating currency system. Bailouts are also unnecessary and even harmful since they encourage irresponsible, high risk investments.

Foreign exchange, Monetary policy, International finance, Foreign loans, Depressions, Economic depressions

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Dumb networks and smart capital

Article Abstract:

The advances in information technology have made possible the creation of an international financial market, such as that of the Eurodollar market, that is neither dependent on reserve requirements nor on a commodity. Currency rates are determined by what the market is willing to pay for them in exchange for another. As the markets are global, individual governments cannot influence to market trend, no matter how dissatisfied they are with the market's ratings.

Economic aspects, Information technology, International economic integration, Economic integration, Foreign exchange market, Euromarkets

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