Contagion, Liberalization, and the Optimal Structure of Globalization
-
Joseph E. Stiglitz
Advocates of capital market liberalization argue that it leads to greater stability: countries faced with a negative shock borrow from the rest of the world, allowing cross-country smoothing. There is considerable evidence against this conclusion. This paper explores one reason: integration can exacerbate contagion; a failure in one country can more easily spread to others. It derives conditions under which such adverse effects overwhelm the putative positive effects. It explains how capital controls can be welfare enhancing, reducing the risk of adverse effects from contagion. This paper presents an analytic framework within which we can begin to address broader questions of optimal economic architectures.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Artikel in diesem Heft
- Research Foundation
- Do Poorer Countries Have Less Capacity for Redistribution?
- Contagion, Liberalization, and the Optimal Structure of Globalization
- Binding Constraints and Second-Best Strategies in Endogenous Growth Models with Public Finance
- Policy Analysis
- Recent Russian Debate on Moving from VAT to Sales Taxes and Its Global Implications
- Aid, Growth, and Development: Have We Come Full Circle?
- Compensation for Indirect Expropriation in International Investment Agreements: Implications of National Treatment and Rights to Invest
- The Past and Future of American Finance: American Experimentalism without American Exceptionalism
- Puzzle
- Borrowing to Save
- Symposium
- Introduction: Is the Era of the Dollar Over?
- Towards A New Global Reserve System
- Does the SDR Have a Future?
- The New Politics of Global Reserve Reform
- An SDR Based Reserve System
- Building an SDR-Based Global Reserve System
- The Future of the Reserve System
- Is the Era of the Dollar Over?
Artikel in diesem Heft
- Research Foundation
- Do Poorer Countries Have Less Capacity for Redistribution?
- Contagion, Liberalization, and the Optimal Structure of Globalization
- Binding Constraints and Second-Best Strategies in Endogenous Growth Models with Public Finance
- Policy Analysis
- Recent Russian Debate on Moving from VAT to Sales Taxes and Its Global Implications
- Aid, Growth, and Development: Have We Come Full Circle?
- Compensation for Indirect Expropriation in International Investment Agreements: Implications of National Treatment and Rights to Invest
- The Past and Future of American Finance: American Experimentalism without American Exceptionalism
- Puzzle
- Borrowing to Save
- Symposium
- Introduction: Is the Era of the Dollar Over?
- Towards A New Global Reserve System
- Does the SDR Have a Future?
- The New Politics of Global Reserve Reform
- An SDR Based Reserve System
- Building an SDR-Based Global Reserve System
- The Future of the Reserve System
- Is the Era of the Dollar Over?
