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Financial Market Globalization, Deglobalization Policies and Growth

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  • Wai‐Hong Ho

Abstract

This paper develops a world economy growth model to explore the consequences of financial market globalization. The model consists of small open countries that are plagued by domestic credit market imperfection and are connected via knowledge spillovers. When knowledge diffuses from the technology leader to the world as an international public good, the model predicts that financial market globalization promotes growth despite uphill credit flows dividing the world economy into a high‐income core and a low‐income periphery. But the associated world growth rate is not optimal. Barriers to cross‐border credit flows can give rise to a higher worldwide rate of growth through which all countries can benefit.

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  • Wai‐Hong Ho, 2022. "Financial Market Globalization, Deglobalization Policies and Growth," Economica, London School of Economics and Political Science, vol. 89(356), pages 1024-1049, October.
    • Handle: RePEc:bla:econom:v:89:y:2022:i:356:p:1024-1049
    DOI: 10.1111/ecca.12434
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    References listed on IDEAS

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    Cited by:

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    2. Cham, Yaya, 2023. "Financial Globalization and Bank Lending: The Limits of Domestic Monetary Policy in The Gambia," MPRA Paper 117026, University Library of Munich, Germany.
    3. Feilan Wang & Mengmeng Jin & Jianfeng Li & Yushuo Zhang & Junbo Chen, 2022. "Profound Impact of Economic Openness and Digital Economy towards a Sustainable Development: A New Look at RCEP Economies," Sustainability, MDPI, vol. 14(21), pages 1-21, October.

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