Globalization, Stability and the Financial Markets

The turbulence in East Asia, the contagious effects on financial markets of other emerging economies and even on the major world stock markets, and the renewed instability in exchange rates are, I think, warnings of trouble in a world in which capital is free to flow as never before around the world in amounts and at a speed without precedent. In calling attention to these troubles, I do not want to be misunderstood. There are powerful forces supporting growth through much of the developing world. Yet, we would be naively optimistic to think that all is serene that the recent disturbances are simply a passing blip on our radar screen, without systemic implications, and that rapid growth is assured