International Financial Markets

This research examines the current situation of international financial markets, emphasizing the international debt crisis. Current trends in the global markets will be charted and possible scenarios for the future of the world economy will be discussed. The financial instability hypothesis will be closely analyzed, and an alternative to the traditional theory will be offered. Prior to this analyses, it will be useful first to discuss the recent regulatory framework of international

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y the oil rich countries and those reaching an intermediate stage of industrial development. This large increase in indebtedness was soon followed by significant rises of interest rates by lender countries. The United States and other advanced financial lending countries tightened macroeconomic policies at home and in their international relations to counter the higher costs of fuel, especially in terms of monetary policy. By the end of 1980, the U.S. prime rate reached 21%. Exacerbated by growing fiscal deficits at home, the U.S. prime rate reached a 50-year high just two years later (Nelson, 1980, p. 6). Developing countries throughout the globe, particularly those that had accepted high indebtedness during the apparent boom years of the 1970s for the Third World, now were straddled with an enormous debt service consuming much of export earnings. Mushrooming interest rates brought global industrial development to a standstill. By 1982, nonfuel commodity prices reached record highs in real terms for the developing countries since the Second World War. Finally when Mexico announced its intention to default on its loans, the international financial community was shaken awake as to the extent of the debt crisis. A response by the
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Some common words found in the essay are:
Woods Instead, Community Japan--must, Maynard Keynes, , Debt Crisis, Bank IMF, IMF United, Third World, Monetary Fund, Bank United, international financial, economic growth, debt crisis, developing countries, international debt, financial markets, free market, international financial markets, debtor countries, international debt crisis, international finance, world bank, international monetary fund, international financial community, global economic growth,
Approximate Word count = 2666
Approximate Pages = 11 (250 words per page)

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