The last decade has witnessed the emergence of a more global economy reflecting the continued rise in trade (especially of manufactures) as a proportion of output, a major shift of international specialisation, faster diffusion of technical progress and the globalisation of financial markets....

Many developing countries are currently considering liberalisation of external capital flows. While the ultimate objective of financial opening is to raise efficiency and growth, the reform process must be carefully designed to achieve these results. A recent conference has discussed the policy...