Department of Economics
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NBER Working Papers and Publications
|September 1998||Was There Really an Earlier Period of International Financial Integration Comparable to Today?|
with Michael D. Bordo, Barry Eichengreen: w6738
In this paper we reconsider the international market integration, starting at high levels in the late nineteenth century, collapsing between the wars, and recovering gradually after 1945 to reach levels comparable to pre-1914 in the 1990's. The empirical evidence we survey suggests that in some respects the financial integration of the pre-1914 era remains unsurpassed, but in others today's financial markets are even more closely integrated than those in the past. The difference today is that new information-generating and processing technologies have reduced the market-segmenting effects of asymmetric information. In consequence, the range of financial claims that are traded internationally has broadened. While international financial transactions were once determined by claims on gover...
Published: The Implications of the Globalization of World Financial Markets, Seoul: Bank of Korea (1999).