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Econ Change (2007) 40:305307 DOI 10.1007/s10644-007-9032-2
BOOK REVIEW
Frederic S. Mishkin, The Next Great Globalisation: How Disadvantaged Nations can Harness Their Financial Systems to Get Rich
Princeton University Press, 2006, x + 310 pp, US$27.95, ISBN 13: 978-0-691-12154-3, ISBN 10: 0-691-12154-0
Jos R. Snchez-Fung
Published online: 22 December 2007 Springer Science+Business Media, LLC. 2007
Financial development is critical in determining an economys overall growth and development prospects. That is the case because nancial institutions are well placed to develop and operate a technology that links economic agents who can supply otherwise idle nancial resources with those who demand those resources for investing in specic projects. By performing this role, nancial institutions contribute to achieving better resource allocation and ultimately faster long-run economic growth.
Frederic S. Mishkins The next great globalisation: How disadvantaged nations can harness their nancial systems to get rich main line of argument is that developing countries can encourage nancial development, and therefore benet from its by-products, by embracing globalisation. The central argument is that foreign nancial capital and management know-how can positively contribute to emerging market economies on the way to nancial development. But Mishkin, a member of the Board of Governors of the United States Federal Reserve, acknowledges that meeting certain preconditions is critical for economies seeking to benet from nancial globalisation. Particularly, he draws attention to developing economies idiosyncrasies and the dangers of adopting one-size-ts-all policies. Overall, the text provides a sensible assessment of how globalisation and a more advanced nancial system can help countries in reaching economic development.
The book contains ve parts. Part 1 explains fundamental issues related to nancial development. The exposition draws on the literature explaining how nancial institutions work and their usefulness in enhancing an economys performance. Research efforts in this front nd that nancial development is associated with higher economic...