IDEAS home Printed from https://ideas.repec.org/a/tpr/asiaec/v1y2002i1p91-128.html
   My bibliography  Save this article

What Kind of International Financial Architecture for an Integrated World Economy?

Author

Listed:
  • Yung Chul Park

    (Professor Department of Economics Korea University 1,5-ka, Anam-dong Sungbukku Seoul 136-701, Korea)

  • Yunjong Wang

    (Senior Research Fellow Korea Institute for International Economic Policy C.P.O. Box 235 So-Cho Seoul 137-602, Korea)

Abstract

As was the case in the Mexican crisis of 1994-95, the G-7 and international financial institutions appear to have lost their zeal to garner the support they need for reform. The ongoing debate on the future direction of international financial reform suggests that most of the problems are likely to remain unchanged. This pessimistic outlook arouses a deep concern in developing countries that they will remain vulnerable to future financial crises, even if they faithfully carry out the kinds of reform recommended by the IMF and the World Bank. Given this reality, developing countries may have to develop a national or regional defense mechanism of their own by instituting a system of capital controls, adopting an exchange rate system that lies somewhere between the two-corner solutions, or strengthening regional financial cooperation. Copyright (c) 2002 Center for International Development and the Massachusetts Institute of Technology.

Suggested Citation

  • Yung Chul Park & Yunjong Wang, 2002. "What Kind of International Financial Architecture for an Integrated World Economy?," Asian Economic Papers, MIT Press, vol. 1(1), pages 91-128.
    • Handle: RePEc:tpr:asiaec:v:1:y:2002:i:1:p:91-128
    as

    Download full text from publisher

    File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/153535102320264495
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. repec:bla:intfin:v:2:y:1999:i:3:p:339-60 is not listed on IDEAS
    2. Guillermo A. Calvo & Carmen M. Reinhart, 2002. "Fear of Floating," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(2), pages 379-408.
    3. Kim, Woochan & Wei, Shang-Jin, 2002. "Foreign portfolio investors before and during a crisis," Journal of International Economics, Elsevier, vol. 56(1), pages 77-96, January.
    4. Stanley Fischer, 1999. "On the Need for an International Lender of Last Resort," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 85-104, Fall.
    5. Obstfeld, Maurice, 1986. "Rational and Self-fulfilling Balance-of-Payments Crises," American Economic Review, American Economic Association, vol. 76(1), pages 72-81, March.
    6. Katharina PISTOR, 2000. "The Standardization Of Law And Its Effect On Developing Economies," G-24 Discussion Papers 4, United Nations Conference on Trade and Development.
    7. repec:bla:intfin:v:1:y:1998:i:2:p:327-38 is not listed on IDEAS
    8. Barry Eichengreen, 2000. "The EMS Crisis in Retrospect," NBER Working Papers 8035, National Bureau of Economic Research, Inc.
    9. Dani Rodrik, 2006. "Institutions for High-Quality Growth: What They Are and How to Acquire Them," Chapters, in: Kartik Roy & Jörn Sideras (ed.), Institutions, Globalisation and Empowerment, chapter 2, Edward Elgar Publishing.
    10. Roberto Chang & Andrés Velasco, 2000. "Liquidity Crises in Emerging Markets: Theory and Policy," NBER Chapters, in: NBER Macroeconomics Annual 1999, Volume 14, pages 11-78, National Bureau of Economic Research, Inc.
    11. Miller, Marcus & Zhang, Lei, 2000. "Sovereign Liquidity Crises: The Strategic Case for a Payments Standstill," Economic Journal, Royal Economic Society, vol. 110(460), pages 335-362, January.
    12. Andrew D. Crockett, 1999. "General discussion : exchange rates and financial fragility," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 411-422.
    13. Eichengreen, Barry & Mody, Ashoka, 2000. "Would Collective Action Clauses Raise Borrowing Costs? An Update and Additional Results," Center for International and Development Economics Research, Working Paper Series qt46p4z4c4, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
    14. Chang, Roberto & Majnoni, Giovanni, 2000. "International contagion - implications for policy," Policy Research Working Paper Series 2306, The World Bank.
    15. repec:bla:intfin:v:1:y:1998:i:2:p:311-25 is not listed on IDEAS
    16. Krugman, Paul, 1979. "A Model of Balance-of-Payments Crises," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(3), pages 311-325, August.
    17. Martin,Will & Winters,L. Alan (ed.), 1996. "The Uruguay Round and the Developing Countries," Cambridge Books, Cambridge University Press, number 9780521586016.
    18. Kim, Woochan & Wei, Shang-Jin, 2002. "Offshore investment funds: monsters in emerging markets?," Journal of Development Economics, Elsevier, vol. 68(1), pages 205-224, June.
    19. Willem H. Buiter & Anne C. Sibert, 1999. "UDROP: A Contribution to the New International Financial Architecture," International Finance, Wiley Blackwell, vol. 2(2), pages 227-247, July.
    20. Kenneth Rogoff, 1999. "International Institutions for Reducing Global Financial Instability," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 21-42, Fall.
    21. Chinn, Menzie D., 2000. "Before the fall: were East Asian currencies overvalued?," Emerging Markets Review, Elsevier, vol. 1(2), pages 101-126, September.
    22. C.A.E. Goodhart, 1999. "Myths about the Lender of Last Resort," International Finance, Wiley Blackwell, vol. 2(3), pages 339-360, November.
    23. Louis K.C. Chan & Josef Lakonishok & Theodore Sougiannis, 1999. "The Stock Market Valuation of Research and Development Expenditures," NBER Working Papers 7223, National Bureau of Economic Research, Inc.
    24. Jeffrey D. Sachs & Aaron Tornell & Andrés Velasco, 1996. "Financial Crises in Emerging Markets: The Lessons from 1995," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(1), pages 147-216.
    25. Eichengreen, Barry & Mody, Ashoka, 1999. "Would Collective Action Clauses Raise Borrowing Costs?," CEPR Discussion Papers 2343, C.E.P.R. Discussion Papers.
    26. Robert P. Flood & Peter M. Garber, 1987. "Gold Monetization and Gold Discipline," Palgrave Macmillan Books, in: Robert Z. Aliber (ed.), The Reconstruction of International Monetary Arrangements, chapter 10, pages 183-211, Palgrave Macmillan.
    27. Michael D. Bordo & Bruce Mizrach & Anna J. Schwartz, 1998. "Real versus Pseudo-International Systemic Risk Some Lessons from History," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 1(01), pages 31-58.
    28. Chang, Roberto & Velasco, Andres, 2000. "Financial Fragility and the Exchange Rate Regime," Journal of Economic Theory, Elsevier, vol. 92(1), pages 1-34, May.
    29. Feldstein, Martin, 1999. "A Self-Help Guide for Emerging Markets," Scholarly Articles 2961700, Harvard University Department of Economics.
    30. Roberto Chang & Andrés Velasco, 2000. "Liquidity Crises in Emerging Markets: Theory and Policy," NBER Chapters,in: NBER Macroeconomics Annual 1999, Volume 14, pages 11-78 National Bureau of Economic Research, Inc.
    31. John Williamson, 2000. "The Role of the IMF: A Guide to the Reports," Policy Briefs PB00-5, Peterson Institute for International Economics.
    32. Guillermo A. Calvo & Carmen M. Reinhart, 2000. "Fixing for Your Life," NBER Working Papers 8006, National Bureau of Economic Research, Inc.
    33. Sebastian Edwards, 1999. "How Effective Are Capital Controls?," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 65-84, Fall.
    34. Riccardo De Bonis & Alessandro Giustiniani & Giorgio Gomel, 1999. "Crises and Bail Outs of Banks and Countries: Linkages, Analogies, and Differences," The World Economy, Wiley Blackwell, vol. 22(1), pages 55-86, January.
    35. Kane, Edward J., 2000. "Capital movements, banking insolvency, and silent runs in the Asian financial crisis," Pacific-Basin Finance Journal, Elsevier, vol. 8(2), pages 153-175, May.
    36. Chul Park, Yung & Chung, Chae-Shick & Wang, Yunjong, 2001. "Fear of Floating: Korea's Exchange Rate Policy after the Crisis," Journal of the Japanese and International Economies, Elsevier, vol. 15(2), pages 225-251, June.
    37. Michael P. Dooley, 2000. "Can Output Losses Following International Financial Crises be Avoided?," NBER Working Papers 7531, National Bureau of Economic Research, Inc.
    38. Barry Eichengreen & Ricardo Hausmann, 1999. "Exchange rates and financial fragility," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 329-368.
    39. Joseph CK Yam, 1999. "Capital Flows, Hedge Funds and Market Failure: A Hong Kong Perspective," RBA Annual Conference Volume (Discontinued), in: David Gruen & Luke Gower (ed.),Capital Flows and the International Financial System, Reserve Bank of Australia.
    40. Sebastian Edwards & Miguel A. Savastano, 2000. "The Mexican Peso in the Aftermath of the 1994 Currency Crisis," NBER Chapters, in: Currency Crises, pages 183-236, National Bureau of Economic Research, Inc.
    41. Morris Goldstein, 2000. "Strengthening the International Financial Architecture: Where Do We Stand?," Working Paper Series WP00-8, Peterson Institute for International Economics.
    42. Kazuo Ueda, 1998. "The East Asian Economic Crisis: A Japanese Perspective," International Finance, Wiley Blackwell, vol. 1(2), pages 327-338, December.
    43. Jason Furman & Joseph E. Stiglitz, 1998. "Economic Crises: Evidence and Insights from East Asia," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 1-136.
    44. Morris Goldstein (ed.), 1999. "Safeguarding Prosperity in a Global Financial System: The Future International Financial Architecture," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 50, April.
    45. Jeffrey D. Sachs & Wing Thye Woo, 1999. "The Asian Financial Crisis: What Happened, and What is to be done," William Davidson Institute Working Papers Series 253, William Davidson Institute at the University of Michigan.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lee, Jong-Wha & Shin, Kwanho, 2008. "IMF bailouts and moral hazard," Journal of International Money and Finance, Elsevier, vol. 27(5), pages 816-830, September.
    2. Thomas D. Willett & Ekniti Nitithanprapas & Isriya Nitithanprapas & Sunil Rongala, 2004. "The Asian Crises Reexamined," Asian Economic Papers, MIT Press, vol. 3(3), pages 32-87.
    3. Wang, Yunjong, 2004. "Financial cooperation and integration in East Asia," Journal of Asian Economics, Elsevier, vol. 15(5), pages 939-955, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yung Chul PARK & Yunjong WANG, 2001. "Reform Of The International Financial System And Institutions In Light Of The Asian Financial Crisis," G-24 Discussion Papers 12, United Nations Conference on Trade and Development.
    2. Jeffrey A. Frankel, 2010. "Monetary Policy in Emerging Markets: A Survey," NBER Working Papers 16125, National Bureau of Economic Research, Inc.
    3. Frankel, Jeffrey, 2010. "Monetary Policy in Emerging Markets," Handbook of Monetary Economics, in: Benjamin M. Friedman & Michael Woodford (ed.), Handbook of Monetary Economics, edition 1, volume 3, chapter 25, pages 1439-1520, Elsevier.
    4. Olivier Jeanne, 2009. "Debt Maturity and the International Financial Architecture," American Economic Review, American Economic Association, vol. 99(5), pages 2135-2148, December.
    5. Arminio Fraga & Daniel L. Gleizer, 2001. "Constrained Discretion and Collective Action Problems: Reflections on the Resolution of International Financial Crises," Working Papers Series 34, Central Bank of Brazil, Research Department.
    6. Komulainen, Tuomas, 2001. "Currency crises in emerging markets : Capital flows and herding behaviour," BOFIT Discussion Papers 10/2001, Bank of Finland, Institute for Economies in Transition.
    7. Piersanti, Giovanni, 2012. "The Macroeconomic Theory of Exchange Rate Crises," OUP Catalogue, Oxford University Press, number 9780199653126.
    8. Burnside, Craig, 2004. "Currency crises and contingent liabilities," Journal of International Economics, Elsevier, vol. 62(1), pages 25-52, January.
    9. Giulio Federico, 2001. "IMF Conditionality," Economics Papers 2001-W19, Economics Group, Nuffield College, University of Oxford, revised 01 Sep 2001.
    10. David Fernando LOPEZ ANGARITA, 2006. "Nivel óptimo de Reservas Internacionales y crisis cambiaria en Colombia," Archivos de Economía 3273, Departamento Nacional de Planeación.
    11. repec:zbw:bofitp:2001_010 is not listed on IDEAS
    12. Allen, Franklin & Gale, Douglas, 2000. "Optimal currency crises," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 53(1), pages 177-230, December.
    13. Deabes, Tosson, 2003. "How to Reduce the Risk Of Banking Problems," MPRA Paper 3054, University Library of Munich, Germany, revised Nov 2003.
    14. Michael B. Devereux, 2001. "Financial Constraints and Exchange Rate Flexibility in Emerging Market Economies," Working Papers 152001, Hong Kong Institute for Monetary Research.
    15. Burnside, Craig & Eichenbaum, Martin & Rebelo, Sergio, 2004. "Government guarantees and self-fulfilling speculative attacks," Journal of Economic Theory, Elsevier, vol. 119(1), pages 31-63, November.
    16. Chiţu, Livia, 2012. "Was unofficial dollarisation/euroisation an amplifier of the 'Great Recession' of 2007-09 in emerging economies," Working Paper Series 1473, European Central Bank.
    17. Schmukler, Sergio L. & Vesperoni, Esteban, 2006. "Financial globalization and debt maturity in emerging economies," Journal of Development Economics, Elsevier, vol. 79(1), pages 183-207, February.
    18. Fujiki, Hiroshi & Otani, Akira, 2002. "Do Currency Regimes Matter in the 21st Century? An Overview," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 20(S1), pages 47-79, December.
    19. Chowdhry, Bhagwan & Goyal, Amit, 2000. "Understanding the financial crisis in Asia," Pacific-Basin Finance Journal, Elsevier, vol. 8(2), pages 135-152, May.
    20. Michael B. Devereux & Philip R. Lane & Juanyi Xu, 2006. "Exchange Rates and Monetary Policy in Emerging Market Economies," Economic Journal, Royal Economic Society, vol. 116(511), pages 478-506, April.
    21. Bilge Erten & Anton Korinek & José Antonio Ocampo, 2021. "Capital Controls: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 59(1), pages 45-89, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:asiaec:v:1:y:2002:i:1:p:91-128. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kelly McDougall (email available below). General contact details of provider: https://direct.mit.edu/journals .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.