Global Capital Markets: Blessing or Curse for Transition Economies?

The global integration of financial and capital markets has never been as advanced as it was at the end of the 2000s. Almost all countries have liberalised their capital markets and opened them for international investors. However, this has not contributed to a substantive improvement of capital markets' allocative efficiency. The bulk of international capital flows occurs between the rich countries, whereas capital exports from rich to poor countries are of minor importance. Empirical studies provide evidence that capital markets were more efficient at the end of the 19th century.