Jump to ContentJump to Main Navigation
Show Summary Details
In This Section

Journal of Globalization and Development

Ed. by Stiglitz, Joseph / Emran, M. Shahe / Guzman, Martin / Jayadev, Arjun / Ocampo, José Antonio / Rodrik, Dani

2 Issues per year

Online
ISSN
1948-1837
See all formats and pricing
In This Section

Contagion, Liberalization, and the Optimal Structure of Globalization

Joseph E. Stiglitz
  • Columbia University
Published Online: 2010-12-27 | DOI: https://doi.org/10.2202/1948-1837.1149

Advocates of capital market liberalization argue that it leads to greater stability: countries faced with a negative shock borrow from the rest of the world, allowing cross-country smoothing. There is considerable evidence against this conclusion. This paper explores one reason: integration can exacerbate contagion; a failure in one country can more easily spread to others. It derives conditions under which such adverse effects overwhelm the putative positive effects. It explains how capital controls can be welfare enhancing, reducing the risk of adverse effects from contagion. This paper presents an analytic framework within which we can begin to address broader questions of optimal economic architectures.

Keywords: contagion; liberalization; globalization; capital markets; financial crisis

About the article

Published Online: 2010-12-27



Citation Information: Journal of Globalization and Development, ISSN (Online) 1948-1837, DOI: https://doi.org/10.2202/1948-1837.1149. Export Citation

Citing Articles

Here you can find all Crossref-listed publications in which this article is cited. If you would like to receive automatic email messages as soon as this article is cited in other publications, simply activate the “Citation Alert” on the top of this page.

[1]
Joseph E. Stiglitz
Global Policy, 2011, Volume 2, Number 2, Page 165
[2]
Matteo Cavaliere, Sean Sedwards, Corina E. Tarnita, Martin A. Nowak, and Attila Csikász-Nagy
Journal of Theoretical Biology, 2012, Volume 299, Page 126
[3]
Phurichai Rungcharoenkitkul
Review of Development Finance, 2012, Volume 2, Number 3-4, Page 101
[4]
Joseph E. Stiglitz
Journal of the European Economic Association, 2011, Volume 9, Number 4, Page 591

Comments (0)

Please log in or register to comment.
Log in