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Stiglitz - a safety net for instability Instability has...

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1. Stiglitz (2000) a. What are the main reasons to liberalize capital markets? Developing countries gain the capital necessary for development FDI and FPI from developed countries to developing countries help the developing countries grow. Typically FPI and FDI ratio is larger. What are some of the problems with liberalizing capital markets in developing economies? Liberalizing capital markets in developing countries is a problem because they don’t have
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Unformatted text preview: a safety net for instability. Instability has marked distributional consequences, and developing countries have inadequate stability. FPI is volatile. b. How can a developing country intervene to make capital market liberalization successful? Make more long term FDI, transparency, and accountability/strength...
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