FINANCIAL GLOBALIZATION, EXCHANGE RATES, （金融全球化、汇率、）.pdf

FINANCIAL GLOBALIZATION, EXCHANGE RATES, AND INTERNATIONAL TRADE By Robert A. Blecker* Department of Economics American University Washington, DC 20016-8029 USA (202) 885-3767 Tel. (202) 885-3790 Fax blecker@ *Professor of Economics, American University, and Research Associate, Economic Policy Institute. This paper was prepared for the conference on “Financialization of the Global Economy,” Political Economy Research Institute (PERI), University of Massachusetts, Amherst, December 7-8, 2001. Introduction The global economy has undergone a quantum leap in the degree of integration of international financial markets since the early 1970s. In large measure, this shift was the product of deliberate policy changes, such as the elimination of capital controls and the deregulation of domestic financial markets (Mussa and Goldstein 1993). In addition, dramatic improvements in (and reductions in the cost of) international communications and information technology contributed to the reduction of “natural” barriers to international financial transactions, as well as to the reduction of barriers to foreign direct investment and merchandise trade (Obstfeld 1998; Baldwin and Martin 1999). International financial liberalization was also accompanied, in a somewhat chicken-and-egg causal relationship, by the abandonment of the Bretton Woods system of adjustable exchange rate pegs and the shift to floating exchange rates among the major currencies or regional currency blocs (Eatwell 1996). Financial liberalization also followed upon an earlier (but still ongoing) process of multilatera