Aspects of Global Economic Integration: Outlook for the Future

Abstract

The traditional economic benefits that result from the international flows of goods and capital are so well known to economists that no one at this conference even felt the need to enumerate them. There are however other advantages that are often overlooked and that are worth noting before turning to the three major issues discussed during the past two days. First, the international flows of capital permit a diversification of lending and investment that can reduce the risk to the owners of capital. So much of the attention at this conference has been on the risks of international capital flows that it is important to bear in mind this countervailing effect. If appropriate policies are taken to reduce the likelihood and virulence of international economic crises, 1 the diversification advantages of international capital flows could well be the dominant influence. Second, the global integration of capital markets and the increased volume of foreign direct investment spread the US-UK forms of corporate governance, accounting rules, and perhaps legal traditions as well. There is a growing body of evidence that the Anglo-American