Obstfeld - d. What are the advantages of opening your...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
1. Obstfeld (2009) a. How does he feel about opening capital markets? Open financial systems are more competitive, transparent, and efficient than a closed one. It is for liberalization—but there is no evidence that opening capital markets is good for developing countries. Under the right conditions, liberalization should be good for a country. b. What conditions are required for success? Financial liberalization, good institutions, good people, non corrupt, stable currency, transparency, accountability, good structure. c. What is the channel through which foreign capital can be used most effectively?
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: d. What are the advantages of opening your capital markets when done correctly? Advantages- make financial system better. It allows easier government borrowing, enhances welfare generally, restrictions are more difficult to enforce when a financial system is open, and eases the conduct of domestically oriented monetary policy. e. How developing countries of the world better prepared for the current crisis relative to the Asian Currency Crisis? They have a current account surplus....
View Full Document

Ask a homework question - tutors are online