International Initiatives to Bring Stability to Financial Integration

Fernandez-Arias, Eduardo; Hausmann, Ricardo

doi:10.2139/ssrn.237453

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International Initiatives to Bring Stability to Financial Integration

IADB Research Department Working Paper No. 402

23 Pages Posted: 17 Jan 2001

See all articles by Eduardo Fernandez-Arias

Ricardo Hausmann

Harvard University - Harvard Kennedy School (HKS)

There are 3 versions of this paper

Date Written: March 1999

Abstract

Financial liberalization and integration have generated disappointing results. They were supposed to set up a win-win situation: capital would flow from capital-abundant, low-return, aging industrial countries to capital-scarce, high-return, young emerging countries. Growth in receiving countries would accelerate and both giver and receiver would be happier, while everyone's diversification opportunities improved. As a bonus, emerging market policymakers would be disciplined by losing access to a captive local financial market.

Keywords: international financial architecture, financial crisis, financial contagion

JEL Classification: F33, F34, G15, O19

Suggested Citation: Suggested Citation

Fernandez-Arias, Eduardo and Hausmann, Ricardo, International Initiatives to Bring Stability to Financial Integration (March 1999). IADB Research Department Working Paper No. 402, Available at SSRN: https://ssrn.com/abstract=237453 or http://dx.doi.org/10.2139/ssrn.237453