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Managing the Impact of Volatility in International Capital Markets in an Uncertain World

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  • Jan Kregel

Abstract

International financial flows are the propagation mechanism for transmitting financial instability across borders; they are also the source of unsustainable external debt. Managing volatility thus requires institutions that promote domestic financial stability, ensure that domestic instability is contained, and guarantee that international institutions and rules of the game are not themselves a cause of volatility. This paper analyzes proposals to increase stability in domestic markets, in international markets, and in the structure of the international financial system from the point of view of Hyman P. Minsky's financial instability hypothesis, and outlines how each of these three channels can produce financial fragility that lays the system open to financial instability and financial crisis.

Suggested Citation

  • Jan Kregel, 2009. "Managing the Impact of Volatility in International Capital Markets in an Uncertain World," Economics Working Paper Archive wp_558, Levy Economics Institute.
  • Handle: RePEc:lev:wrkpap:wp_558
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    File URL: http://www.levyinstitute.org/pubs/wp_558.pdf
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    Cited by:

    1. Mario Cimoli & Gabriel Porcile, 2014. "Technology, structural change and BOP-constrained growth: a structuralist toolbox," Cambridge Journal of Economics, Oxford University Press, pages 215-237.
    2. Mario Cimoli & Gabriel Porcile, 2011. "Tecnología, heterogeneidad y crecimiento: un caja de herramientas estructuralista," Working Papers 0119, Universidade Federal do Paraná, Department of Economics.
    3. Sabatini, Fabio, 2009. "Does social capital create trust? Evidence from a community of entrepreneurs," AICCON Working Papers 58-2009, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    4. Mario Tonveronachi, 2010. "Financial innovation and system design," PSL Quarterly Review, Economia civile, vol. 63(253), pages 131-144.

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