Managing Financial Globalization: A Guide for Developing Countries Based on the Recent Literature
Based on recent literature on financial globalization, this guide by the
Asian Development Bank describes how cross-border capital flows provide new opportunities for developing countries to improve efficiency, increase investment, and reduce risks. They are, however, also being a source of economic instability. Drawing on lessons for developing countries, the guide shows how distortions in domestic financial markets, international capital markets, domestic labour markets, and domestic public governance, can make financial globalization less beneficial for developing countries. These countries sometimes need to insulate themselves from foreign monetary policy shocks. As nominal exchange rate flexibility is not sufficient for policy autonomy, management of capital flows may be needed.
https://www.adb.org/sites/default/files/publication/399286/adbi-wp804.pdf
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