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Curent Event Controled Economy

Curent Event Controled Economy - Spencer Karren Week 1...

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Spencer Karren Week 1 Kevin P. Gallagher, a professor at Boston University and author of the new UN study, wrote an interesting article called, “US trade agreements threaten emerging markets’ financial stability”. The article begins, “At the recent annual meeting of the Asian Development Bank Taiwan’s Central Bank governor Perng Fai-nan urged emerging market nations in Asia to use capital controls to promote financial stability.” Before I could understand what the article was trying to explain, I needed to define and understand what capital controls is. BusinessDictionary.com defined it as, “Government policy of restricting locals from acquiring foreign assets (capital outflow) and or restricting foreigners from acquiring local assets (capital inflow).” The article goes on to explain that the executive secretary of the United Nations Economic and Social Commission for Asia and the Pacific listed China, India, Singapore, Indonesia and South Korea at the most vulnerable nations in need of controls. Globalization has increased the acceleration of currency domain strength, in other words, giving some currencies utility far beyond their physical geographic boundaries. Capital controls have become more prominent in the years since the Clinton administration efforts of the world community to create the World Trade Organization ( WTO ). The article goes on to explain that the International Monetary Fund (IMF) economists found that those countries that deployed capital controls in the run-up to the current crisis were among the least hard hit from the global financial crisis.
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The author makes an interesting point on how US trade and investment agreements conflict with the safeguard measures found in the World Trade Organization (WTO).
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