Book contents
- Critical Junctures in Mobile Capital
- Critical Junctures in Mobile Capital
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Contributors
- Acknowledgements
- Introduction
- 1 Sovereign Nations and the Governance of International Finance
- 2 Coping with the Dangerous Component of Capital Flows and Asia’s Ineffective Cooperation
- 3 How Mobile Capital Plays Off Democracy
- 4 Mobile Capital as the Ultimate Form of War Finance
- 5 Capital Moves Financially
- 6 International Money after the Crisis
- 7 Beware of Financialization!
- 8 Lagoon Immobility
- 9 Impacts of Mobile Capital’s ‘Convenient Reverse Logic’
- 10 Imagine
- 11 Money, State and Capital
- 12 Superdiversity, Exploitation and Migrant Workers
- 13 The Bitcoin or the Reality of a Waking Dream
- 14 Capital Mobility and the Fragmentation of Monetary Sovereignty
- 15 Complementary Currencies as Weapons in Times of Financial Instability
- Index
- References
2 - Coping with the Dangerous Component of Capital Flows and Asia’s Ineffective Cooperation
Published online by Cambridge University Press: 26 February 2018
By
Book contents
- Critical Junctures in Mobile Capital
- Critical Junctures in Mobile Capital
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Contributors
- Acknowledgements
- Introduction
- 1 Sovereign Nations and the Governance of International Finance
- 2 Coping with the Dangerous Component of Capital Flows and Asia’s Ineffective Cooperation
- 3 How Mobile Capital Plays Off Democracy
- 4 Mobile Capital as the Ultimate Form of War Finance
- 5 Capital Moves Financially
- 6 International Money after the Crisis
- 7 Beware of Financialization!
- 8 Lagoon Immobility
- 9 Impacts of Mobile Capital’s ‘Convenient Reverse Logic’
- 10 Imagine
- 11 Money, State and Capital
- 12 Superdiversity, Exploitation and Migrant Workers
- 13 The Bitcoin or the Reality of a Waking Dream
- 14 Capital Mobility and the Fragmentation of Monetary Sovereignty
- 15 Complementary Currencies as Weapons in Times of Financial Instability
- Index
- References
Summary
The idea of free flows of capital is at the heart of financial and capital account liberalization. It was a standard sermon of the IMF and other international financial institutions especially from the 1980s. While most countries experienced higher growth after implementing liberalization, subsequent crises demonstrate that rising capital flows can also bring financial instability. Central to the explanation is the changing behavior of agents towards more risk-taking actions when liquidity is abundant. When trying to find the problem like in the 1997 Asian Financial Crisis, however, international institutions never questioned the role and virtue of frictionless capital flows. The 2008 Global Financial Crisis changed their stand, to admit that early preaching on liberalization and free flows of capital was flawed. Since domestic policy and safety nets are too small to counter the powerful effects of crisis contagion, regional financial safety nets are expected to fill the gap. But Asia’s experience on such cooperation has been disappointing. Hence, individual countries are left to cope with the problems by using their own domestic efforts. With bank-led flows, it is argued that imposing levies on the dangerous component of capital inflows, amid growing ‘financial nationalism’, could mitigate the risks of financial instability.
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- Critical Junctures in Mobile Capital , pp. 52 - 67Publisher: Cambridge University PressPrint publication year: 2018
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