The Case for Regulating International Capital Flows

  • Louise Davidson


How one interprets financial market activity and chooses a policy stance regarding the regulation of such markets depends on the underlying economic theory that one explicitly, or implicitly, utilizes to explain the role of financial markets in an entrepreneurial economy. There are two major alternative theories of financial markets: (1) the Classical efficient market theory (hereafter EMT) and (2) Keynes’s liquidity preference theory (hereafter LPT). Each theory produces a different set of policy prescriptions.


Depression Europe Covariance Income Assure 


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© Paul Davidson 1999

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  • Louise Davidson

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