[Download] "Financial Crises, Liberalization, And Government Size." by The Cato Journal # eBook PDF Kindle ePub Free
eBook details
- Title: Financial Crises, Liberalization, And Government Size.
- Author : The Cato Journal
- Release Date : January 01, 2007
- Genre: Politics & Current Events,Books,
- Pages : * pages
- Size : 258 KB
Description
There is a broad consensus among economists that financial crises are costly, as evidenced by the Asian currency crisis in 1997 and other systemic crises during the 1990s (Hawkins 1999; Klingebiel and Laeven 2002). However, there is little agreement on the cause of financial fragility, not to mention the policy prescriptions for financial stability. A perennial heated controversy is the role of government versus the market in promoting and maintaining financial stability. Against the background of frequent outbreaks of financial crises following the global trend of financial liberalization over the past quarter of a century, many economists have pointed to financial liberalization as an important source of financial instability. For example, Jomo (1998) argues that the Malaysian crisis in 1997 was due to financial liberalization rather than excessive regulation. Empirically, such a view is to some extent supported by certain studies that show that financial liberalization has induced excessive risk taking by financial institutions and ultimately precipitated financial crises (Demirguc-Kunt and Detragiache 2001, 2005; Noy 2004). Since the Asian crisis, many economists and policymakers have called for stronger regulation of financial markets. A popular view is that global financial markets are now beyond the control of governments and that financial crises are the consequence (Strange 1998, 2002). Adherents of that view call for tighter state control over financial markets.