Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If you need an accessible version of this item please contact JSTOR User Support

Invested Interests: The Politics of National Economic Policies in a World of Global Finance

Jeffry A. Frieden
International Organization
Vol. 45, No. 4 (Autumn, 1991), pp. 425-451
Published by: The MIT Press
Stable URL: http://www.jstor.org/stable/2706944
Page Count: 27
  • Read Online (Free)
  • Download ($34.00)
  • Subscribe ($19.50)
  • Cite this Item
If you need an accessible version of this item please contact JSTOR User Support
Invested Interests: The Politics of National Economic Policies in a World of  Global Finance
Preview not available

Abstract

Capital moves more rapidly across national borders now than it has in at least fifty years and perhaps in history. This article examines the effects of capital mobility on different groups in national societies and on the politics of economic policymaking. It begins by emphasizing that while financial markets are highly integrated within the developed world, many investments are still quite specific with respect to firm, sector, or location. It then argues that contemporary levels of international capital mobility have a differential impact on socioeconomic groups. Over the long run, increased capital mobility tends to favor owners of capital over other groups. In the shorter run, owners and workers in specific sectors in capital-exporting countries bear much of the burden of adjusting to increased capital mobility. These patterns can be expected to lead to political divisions about whether or not to encourage or increase international capital market integration. The article then demonstrates that capital mobility also affects the politics of other economic policies. Most centrally, it shifts debate toward the exchange rate as an intermediate or ultimate policy instrument. In this context, it tends to pit groups that favor exchange rate stability against groups that are more concerned about national monetary policy autonomy and therefore less concerned about exchange rate stability. Similarly, it tends to drive a wedge between groups that favor an appreciated exchange rate and groups that favor a depreciated one. These divisions have important implications for such economic policies as European monetary and currency union, the dollar-yen exchange rate, and international macroeconomic policy coordination.

Page Thumbnails

  • Thumbnail: Page 
[425]
    [425]
  • Thumbnail: Page 
426
    426
  • Thumbnail: Page 
427
    427
  • Thumbnail: Page 
428
    428
  • Thumbnail: Page 
429
    429
  • Thumbnail: Page 
430
    430
  • Thumbnail: Page 
431
    431
  • Thumbnail: Page 
432
    432
  • Thumbnail: Page 
433
    433
  • Thumbnail: Page 
434
    434
  • Thumbnail: Page 
435
    435
  • Thumbnail: Page 
436
    436
  • Thumbnail: Page 
437
    437
  • Thumbnail: Page 
438
    438
  • Thumbnail: Page 
439
    439
  • Thumbnail: Page 
440
    440
  • Thumbnail: Page 
441
    441
  • Thumbnail: Page 
442
    442
  • Thumbnail: Page 
443
    443
  • Thumbnail: Page 
444
    444
  • Thumbnail: Page 
445
    445
  • Thumbnail: Page 
446
    446
  • Thumbnail: Page 
447
    447
  • Thumbnail: Page 
448
    448
  • Thumbnail: Page 
449
    449
  • Thumbnail: Page 
450
    450
  • Thumbnail: Page 
451
    451