Global Capital Flows and Financial Disturbances in Developing and Emerging Markets

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Global Capital Flows and Financial Disturbances in Developing and Emerging Markets. (2015). Global Capital Flows and Financial Disturbances in Developing and Emerging Markets, (1), 47-61. Retrieved from https://www.ceeol.com/search/article-detail?id=476963
Details
Title

Global Capital Flows and Financial Disturbances in Developing and Emerging Markets

Subtitle
Author
Journal

LIMESplus

Volume
Issue

1

Start page

47

End page

61

ISSN

1820-0869

ISBN
DOI
URL

https://www.ceeol.com/search/article-detail?id=476963

Date

2015-2021/10/18/12:07:37

Abstract

Summary/Abstract: In this paper we analyze the relationship between the free movement of global capital and financial disturbances in developing and emerging markets and recommend strategies aiming at preventing financial crises in the short and the long run. In the short run it is of utmost importance that economic authorities in developing and emerging markets constrain indebtedness and design a correlated capital structure of domestic market participants. In the long run, the superior strategy is to build a strong industrial sector which generates economies of scale, innovations and synergies with other sectors. Control of capital flows could prove as a useful strategy in constraining indebtedness and designing a desirable capital structure of local economic actors.

Keywords

capital controls, current account, financial imbalances, financial instability