Over the last 200 years, economies have accumulated significant experience in managing capital flows in the face of globalization. This study examines management of capital flows since the 1800s with an eye towards providing historical lessons for Southeast Asia today. We start with the global sterling/gold standard regime of the late 19th century globalization and then discuss the tumultuous inter-war period. We then examine policies in Southeast Asian countries since the 1950s. In the 1980s and 1990s, many economies faced increasing financial instability related to the resumption of global capital flows, most noticeably in Southeast Asia during the Asian Financial Crisis. The paper examines the historical importance of exchange rate policies for capital flow stability. Capital flow management in the 21st century faces various challenges such as enhanced state-intervention and digital currencies.
Authors
- Acknowledgements & Disclosure
- Christopher M. Meissner has no disclosures as regards the research in this working paper. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- DOI
- https://doi.org/10.3386/w33145
- Pages
- 41
- Published in
- United States of America
Table of Contents
- 1. Introduction 3
- 2. The Golden Age of Globalization: The Gold/Sterling Standard 4
- 3. The Unstable Inter-War Period: Dollar vs Sterling and the Great Depression 8
- 4. The Bretton Woods Period: Coordination and Breakdown 13
- 5. Bretton Woods periods in Southeast Asia and the Gold/Sterling Standard 14
- 6. Post-Bretton Woods and capital flows in Southeast Asia 19
- 7. Crises in 1990s - Asian Financial Crisis and Sterling Crisis 24
- 8. Managing Contemporary Capital Flows in 21st century in Southeast Asia 28
- 9. Conclusions 33
- References 35
