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Global Financial Markets: Volatility and Reforms

Language:  English
This book provides a theoretical framework for monetary policy in open economies. The role of the central bank, international financial system and financial crises are discussed.
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Financial market developments cause significant impact on economic performance. The primary function of the financial markets is to act as an intermediary between savers and investors. As a result of increased international capital mobility and globalization, developments in financial markets lead to global financial and economic volatility. The book examines the operation of the international financial system with emphasis on financial crises and stability. Several reforms introduced after the Great Recession of 2008 are also included. In addition, the basic approaches to understanding banking, finance and monetary management in open economies and some pressing policy reforms in response to the Great Recession of 2008 are presented. Readers are provided with a more knowledgeable background enabling them to discuss financial market performance and global financial instability issues.

About the authors

Mehdi completed a B.S. in Economics from Utah State University and a M.S. and a Ph.D in Economics from Southern Illinois University, Carbondale, Illinois, U.S.A. His extensive experience in the banking and finance sector includes positions as Executive Director, Bank Refah and Bank Omran, Tehran, Iran, Economist, First Wisconsin National Bank of Milwaukee, London and Economist, Research Department, Reserve Bank of Australia. After eight years as Associate Professor of Economics, School of Economics and Political Science, The National University of Iran, he spent a further 20 years as an academic economist at the University of New South Wales, Australia including the Associate Head of the School of Economics position. He has held Visiting Scholar positions at Columbia University, London School of Economics and Political Science, and the University of Kent, Canterbury, United Kingdom. Currently he is visiting fellow at the School of Economics, University of New South Wales.

John completed a Bachelor of Economics from the University of Sydney, Master of Economics from the University of New England and a M.A and PhD in Economics from Duke University, USA. He spent 22 years as an academic economist at the University of New South Wales, Australia including the Head of Department position. Thereafter he was Head of the School of Economics and Finance at the University of Western Sydney for a further five years. He is now associated with the S P Jain School of Global Management.

  • Preface
  • About The Authors
  • Introduction
  1. The International Financial System
    1. Eurocurrency Markets
    2. The Gold Standard
    3. Bretton Woods System and International Monetary Fund (IMF)
    4. The Role of Quotas
    5. Special Drawing Right (SDR)
    6. Evaluation of Bretton Woods (BWS)
    7. Recent Changes in IMF and Exchange Rate Arrangements
    8. Bank for International Settlements (BIS)
    9. Functions of Central Banks:
    10. References
  2. International Capital Mobility
    1. Measurements of ICM
    2. Direct Measures of Capital Mobility
    3. ICM and Financial Crises
    4. Capital Controls
    5. References
  3. International Trade
    1. Open Economies
    2. International Economic Theory
    3. Heckscher – Ohlin (HO) Theorem
    4. Free Trade Restrictions
    5. Tariffs and Quotas
    6. Export Subsidies
    7. Trade Liberalization
    8. World Trade Organization (WTO)
    9. A contrarian view
    10. Refrences
  4. Global Financial Crises
    1. Indicators of Financial Instability
    2. Asian Financial Crises
    3. Subprime Mortgage Crises (SMC)
    4. Emerging Markets Financial Crises
    5. References
  5. European Monetary Union and Debt Crises
    1. Earlier Developments
    2. Theoretical discussion
    3. Monetary Policy in EMU
    4. Fiscal Policy and Debt Crises
    5. Greece Debt Crises
    6. References
  6. Great Depression and Great Recession Compared. Does History Repeat Itself?
    1. The Great Depression 1929 - 1939
    2. The Great Recession 2007 - 2009
    3. References
  7. International Macroeconomic Policy Coordination
    1. Theoretical Discussion
    2. International Macro Policy Coordination
    3. Are we all Keynesians Again?
    4. Chicago, The General Theory and the pitfalls of activist stabilization policy
    5. The Perils of Fiscal Remedies
    6. Concluding remarks
    7. References
  8. Oil Price and the Global Economy
    1. 1973 – 1980
    2. 1981 – 2004
    3. 2005 – 2008 Rising Oil Prices
    4. Weak Oil Price 2015 – 2016
    5. Future Out-look
    6. References
  9. Post Financial Crises Reforms
    1. Monetary Policy and Banking Reforms
    2. Basel III
    3. Short Term Selling Restrictions
    4. European Financial Reforms
    5. References
  • Endnotes
About the Authors

Mehdi Monadjemi


John Lodewijks