The Internationalization of Capital


Ch. 2 in John Stephens, Herbert Kitschelt, Peter Lange, and Gary Marks (eds.), Change and Continuity in Contemporary Capitalism. New York: Cambridge University Press, 1999, 36–69

The internationalization and integration of capital markets has been the most significant change in the political economy of the industrialized countries over the past three decades. From the Great Depression to the Bretton Woods period, capital markets developed largely within national boundaries. Yet the past three decades have witnessed historically unprecedented growth in cross–border capital movements that have surpassed those of the late nineteenth century, often thought of as a golden age of international finance. Moreover, since World War II, the integration of capital markets has been far more rapid and complete among the industrialized countries than has the integration of markets for goods and services. No other area of the economy has been so thoroughly internationalized as swiftly as have capital markets since the 1970s.