The Integration of World Capital Markets: Some Economic and Social Implications*

Argy, Fred

doi:10.1111/j.1759-3441.1996.tb00111.x

Cited by 6 publications

(4 citation statements)

References 3 publications

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“…A number of analysts have also questioned the basic efficiency of financial markets in general (Argy 1996;. They argue that the improved allocation of capital implied in the basic neoclassical model only occurs if information is adequate and reliable, which does not necessarily happen when markets 'herd', trade on noise and rumours, or overreact.…”

Section: Second-best Argumentsmentioning

confidence: 97%

The Literature on Capital Controls

Brouwer

1999

Australian Economic Review

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Section: Second-best Argumentsmentioning

confidence: 97%

The Literature on Capital Controls

Brouwer

1999

Australian Economic Review

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“…In such cases the market or direct approach is not invariably the preferred option. There are similar queries about aspects of financial deregulation (Argy 1996).…”

Section: A Brief Evaluationmentioning

confidence: 99%

The Liberal Economic Reforms of the Last Two Decades: A Review

Argy

2001

Aust J Public Adm

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In reviewing the liberal economic reforms of the last two decades, the paper makes a distinction between three groups of reforms. One involved the improvements in the administration of government functions (managerialism, outsourcing and privatisation). Another involved the adoption of more direct or market-based methods of policy intervention (such as budget subsidies, incentives, taxes and transfers in lieu of regulation, protection and financial controls). These two groups of reforms were economic-driven: they sought to improve the efficiency and effectiveness of government. Although many mistakes in design and implementation were made, they largely achieved their intended objectives. With sensitive implementation, the reforms achieved a better balance between efficiency and equity than in most other countries. A third group of reforms embodied a new set of policy paradigms (such as downgrading of full-employment and unconditional need-based welfare relative to other policy goals). They offered few efficiency or economical benefits and were mainly driven by idealogy.

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“…It has been well documented, for example, that financial markets can be too focused on the short term, too sensi tive to new information, or too caught up in fads that drive financial ^prices away from die economic fundamentals which are diought to lie behind them. This may be, in part, because they sometimes follow risk-management techniques or trading rules -like charting, technical analysis, program trading, stop-loss orders and dy namic hedging techniques -that are not necessarily related to macroeconomic fundamentals (Argy, 1996).…”

Section: Challengesmentioning

confidence: 99%

Deregulation and Open Capital Markets: The Australian Experience Before Wallis

Brouwer¹

1999

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JTUCH has been written recently on the 1998 'Wallis reforms' to the Aus-% / 1 tralian financial system. But while they are important, they follow an ear-1-▼ J L lie r period of financial deregulation. Australia started liberalising its fi nancial markets in the 1970s, and the process was essentially completed by 1986. This article reviews the reform sequence before Wallis, and examines the ef fects (some of which were unexpected) of reform on financial and other markets, the macroeconomy, and the policy environment. In particular, implications for the transmission of monetary policy are examined, along with sc ~ of the challenges that liberalisation and internationalisation pose for policy-makers. The Sequence of Financial Reforms This section outlines the sequence and motivation of reform up to, but not includ ing, die Financial System ('Wallis') Inquiry (1997).' At the start of the 1970s, die Australian financial system was closed and highly regulated. Interest rates were con trolled by die audiorides, strict limits were placed on bank lending, financial institudons were required to buy government securities at non-market prices, and move ments of capital into and (especially) out of the country were tighdy controlled. This system was reformed gradually between die mid-1970s and die mid-1980s. The domestic financial system and die capital account were reformed more or less simultaneously. Domestic reform comprised die two elements of deregulating bank operations (notably the removal of controls over interest rates on certificates of deposits in Sep tember 1973, other bank deposits in December 1980, and loan rates in April 1985) and liberalising markets in government securities (notably the shift from a 'tap' to a market-based tender system for Treasury Notes in December 1979 and Treasury Bonds in August 1982). Deregulation of banking operations gave banks responsi bility, allowing them to shift from simple credit allocation to liabilities management l A chronology o f reform o f the domestic financial sector and the capital account is provided in an Appendix. Accounts o f financial deregulation in Australia include Harper (1986), Battellino and

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The Integration of World Capital Markets: Some Economic and Social Implications*

Cited by 6 publications

References 3 publications

The Literature on Capital Controls

The Literature on Capital Controls

The Liberal Economic Reforms of the Last Two Decades: A Review

Deregulation and Open Capital Markets: The Australian Experience Before Wallis

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