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From Worldwide Capital Mobility to International Financial Integration: A Review Essay

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  • George Furstenberg

Abstract

To be useful to economists, the definition of worldwide financial integration must refer to its welfare-relevant functions or consequences. What ultimately matters is its contribution to the equalization of current and intertemporal trading opportunities, represented by the cost of financial services, at maximum efficiency levels. Analyzing imperfect financial integration implies identifying the obstacles that prevent such equalization, with a lack of perfect capital mobility being only one of the possible impediments. Focusing on how to achieve international equalization, at least cost, of a broad range of financial services is a necessary change for a literature that has tended to rely on single stock, flow, or price correlations to gauge the degree of financial integration, without viewing it as a continuing microeconomic task with many facets. Copyright Kluwer Academic Publishers 1998

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Bibliographic Info

Article provided by Springer in its journal Open Economies Review.

Volume (Year): 9 (1998)
Issue (Month): 1 (January)
Pages: 53-84

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Handle: RePEc:kap:openec:v:9:y:1998:i:1:p:53-84

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Web page: http://www.springerlink.com/link.asp?id=100323

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Keywords: international capital mobility; financial integration; financial services;

References

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Cited by:
  1. Pieterse-Bloem, M., 2011. "The effect of Emu on bond market integration and investor portfolio allocations," Open Access publications from Tilburg University urn:nbn:nl:ui:12-4742837, Tilburg University.
  2. Michele FRATIANNI, 2007. "Borders and the Constraints of Globalization," Working Papers 282, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  3. Lothian, James R., 2002. "The internationalization of money and finance and the globalization of financial markets," Journal of International Money and Finance, Elsevier, vol. 21(6), pages 699-724, November.
  4. Vo, Xuan Vinh & Daly, Kevin James, 2007. "The determinants of international financial integration," Global Finance Journal, Elsevier, vol. 18(2), pages 228-250.
  5. Hong G. Min & McDonald, Judith A., 1999. "Does a thin foreign exchange market lead to destabilizing capital-market speculation in the Asian Crisis countries?," Policy Research Working Paper Series 2056, The World Bank.

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