Chapter 5: Financial Globalization Follies

Question 1

Lack of capital controls meant what?

Answer 1

Lenders could cut back on issuing loans if there was a market scare. Banks could lock up capital at the slightest hint of a crisis. This actually caused crisis by allowing nations to hemorrhage money at the slightest sign of risk.

Question 2

Instead of capital controls, what system did the bretton woods regime implement to stabilize capital outflows?

Answer 2

The dollar as a “global currency” using the “dollar exchange standard”

Question 3

What’s the problem with this chapter?

Answer 3

It’s boring and terrible.