|
► |
Risks of
instability associated with the ability of
capital to migrate easily to different
locations as a result of change in risk
return configurations, indeed information,
technology and other technological advances
have significantly lowered the response time
of capital and especially financial capital
|
|
► |
The reactions
to policy can be very destabilizing with
large capital outflows heightening exchange
rate pressure and weaknesses of the banking
system
|
|
► |
Globalization also exposes countries to
shocks occurring else where in the
international economy. Several emerging
markets in Asia, Latin America and Central
Europe -felt some repercussions from
Mexican, Asian and Russian Crisis.
|
|
► |
Globalization also exposes developing
countries to changes in the stance of
monetary policy in industrial countries due
to the changes in interest rate conditions
in industrial countries, which will have an
impact on relative attraction of investing
in developing country financial instruments.
|
|
► |
Globalization reduces certain degree of
freedom that policy makers as countries must
always take into account the international
context in which their policies are
implemented.
|
| |
“The most often used illustration in this
context is the implications of globalization
for taxation instruments. As factors of
production become more mobile, large
differences in tax incidence among countries
can lead to migration of activities. At the
same time they "over competition" in tax
policy which through tax exemptions and
concessions, might lead to a fragmented and
inefficient tax system”. |
| |
|
| |
More Resources |
|
► |
Fischer, Stanley 2003
"Globalization
and Its Challenges"
Richard Ely Lecture presented in January
2003 at the American Economic Association
Meeting in Washington, DC.
|
|
► |
Schuurman, Frans J.
Globalization and Development Studies:
Challenges for the 21st century
(ed.) (London: Thousand Oaks)
|
|
► |
American
University in Cairo (1998)
Globalization:
blessing or curse? (Cairo:
American University in Cairo) |
| |
|
| |
|
