International Capital Flows, the International Agencies and Financial Stability

  • Stanley Fischer


The 1987 stock market crash moved around the world within a day, a reflection of the integration of the international capital markets that by now has erased most of the obstacles to capital flows erected during the Great Depression and World War II. Today capital flows freely among the major industrialized countries, and even though policymakers occasionally express their exasperation over the consequences, no one seriously believes that it is possible to stop it.1 Many middle income countries are returning to the global capital markets as industrialized country investors search out emerging markets, and as the international bond markets welcome issues by countries that only a short while ago were regarded as hopelessly mired in debt. In brief, international capital markets are as linked today as they were in the heyday of the international gold standard a century ago.


Real Interest Rate International Capital Debt Crisis International Capital Market Stock Market Crash 
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Copyright information

© The Bank of Japan 1995

Authors and Affiliations

  • Stanley Fischer
    • 1
  1. 1.Massachusetts Institute of TechnologyUSA

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