International Capital Mobility Essay -- Economics Economy Financial Is

International Capital Mobility â€Å"Globalization is today's reality. Like it or not, the move to a world economy is a fact of life. At some point in the 1990s the process achieved critical mass and people started to sit up and take notice. Many were apprehensive. Today, almost all of us are aware that our lives are being shaped by an interconnected world economy of cross-border flows of trade, finance and technology. In our hearts, we know that there is no going back.† -Maria Livanos Cattaui, Secretary General of the International Chamber of Commerce. As evidenced by the above quotation, any analysis of the central economic issues of our time is incomplete without a clear understanding of the increasing interconnectedness among nations. Globalization and integration are two very potent and monumental forces that are rapidly transforming not only the way individuals and governments conduct business, but the nature of the modern world itself. Nations’ economies interact on a level unforeseen a century ago, consequently rendering isolationism no longer possible. The ties that bind are growing tighter and economic phenomena are transcending the local to have worldwide implications. It is therefore imperative for today’s observer of economic events to be knowledgeable about the greater picture surpassing the regional. In this regard, there is no greater subject to begin studying than global finance. The international financial system is a phenomenon of vast importance that has demonstrated its power in fueling large amounts of economic growth. Many extol its virtues, citing the massive gains in productivity it channels. Others, however, harbor misgivings and claim... ...ld Economic Crisis,† New Republic April 17, 2000. 7 Paul Krugman, â€Å"Capital Control Freaks,† Slate/The Dismal Science September 28, 1999. 8 Paul Krugman, â€Å"Capital Control Freaks.† 9 J. Bradford DeLong 10 Robert Krol, â€Å"The Case for Open Global Capital Markets,† Cato Trade Briefing Paper: March 15, 2001. 11 Robert Krol 12 Robert Krol 13 Robert Krol 14 Robert Krol 15 Robert Krol 16 Robert Krol 17 Lawrence H. White, â€Å"Asia Needs Capital Controls? It Just Ain’t So!† Freeman March, 1999. 18 Lawrence H. White 19 Anna J. Schwartz, â€Å"International Financial Crises: Myths and Realities† Cato Journal , Winter 1998: 251-256 20 Lawrence H. White 21 David F. DeRosa, In Defense of Free Capital Markets: The Case Against a New International Financial Architecture, (Princeton: Bloomberg Press, 2001) xiv. 22 DeRosa xiv.