Enhanced descriptions from Syndetics:

This title shows how the globalisation of finance should have brought substantial benefits, but in practice it brought a series of devastating currency and banking crises in the 1980s and 1990s, particularly in the developing world.

Reviews provided by Syndetics

Publishers Weekly Review

In his latest, author and economics journalist Wolf (Why Globalization Works) pronounces the current, "nearly inevitable" global economic crisis the product of a "perfect storm" of global macroeconomic imbalances: the scale of net borrowing by the U.S. and the lack of corporate demand for outside funding, exacerbated by aggressive monetary easing, consequent financial excess, and the housing bubble. Wolf's writing is hardly popular economics, requiring some work to understand and absorb, but it bridges a gap in economic understanding not yet addressed by Congressional subcommittees or the media, whose only suspects thus far have been Republican free market policy and Wall Street greed. The primary problem, argues Wolf, is global reliance on the United States as the borrower of last resort. Whether Wolf is correct is another question-determining that would require putting his suggested policies into action. Domestic financial housecleaning aside, Wolf's plan includes countries like China finding domestic uses for their enormous account surpluses and emerging countries creating first-world financial systems that complement but don't depend upon global financial markets, goals requiring significant international cooperation. Heavy but rewarding, Wolf's analysis fills in a lot of blanks for those seeking to understand the new U.S. recession in a global context. (Nov.) Copyright 2008 Reed Business Information.

CHOICE Review

Wolf (Univ. of Nottingham, UK; chief economics columnist, Financial Times) analyzes problems related to global payment imbalances, especially the persistent current account deficits of the US. He connects national imbalances with a series of world financial crises including the credit crisis that began in 2007 with the subprime mortgage problems in the US. The book reviews historical financial crises and covers both domestic and international reforms. Wolf identifies weaknesses in domestic currencies and bond markets in emerging market countries as a source of these problems. The inability of these emerging market countries to borrow internationally in their own currencies (commonly called "original sin") is a result of monetary and fiscal policies that have produced inflation and devaluations. The author views domestic reforms that result in greater credibility for currencies as difficult but crucial. His suggestions for international monetary reform include an expanded role for the International Monetary Fund and a change in incentives that would redirect international capital flows toward low-income countries and away from the US. Given the world's current economic crisis, Wolf's book is timely. Summing Up: Recommended. Research and faculty collections. T. J. Grennes North Carolina State University