The effects of financial globalization on economic policies

Abstract

This study examines the effects of the globalization of the financial markets on national economic policies. The globalization of finance increasingly separates the financial capital from the state. In this respect; political control, stability, regulation and encouragement of economic activities become more separated. The influence of financial deregulation and information technologies renders regulation and protection more difficult for the state. Financial commodities exhibit a structure in financial markets, which consistently changes conceptually and numerically and which has a high elasticity of production. One of the most important outcomes of the globalized financial markets is the increasing hegemony of these financial commodities on the economic structure. In this respect, economic policies that the nation-state can implement in its own geography become more limited and ineffective. © EuroJournals Publishing, Inc. 2010.