Introduction: Global Financial Flows, Stocks, Economic Power, and Financial Sustainability Under the Current Structure of Global Finance

Abstract

In the introductory chapter the author presents a short overview of the book structure. He points out that the main focus of this book is on: (i) the concentration of financial stocks, as measured by accumulated assets and liabilities (i.e. the economies’ international investment positions), (ii) economic changes caused by differential rates of economic growth, and (iii) the financial efficiency and sustainability of the present global economic and financial structure. The book has, accordingly, three central chapters. Chapter 2 offers a cross-country analysis of global financial assets and liabilities. Chapter 3 looks at recent changes in the respective roles played by emerging markets and the advanced economies in the creation of world GDP. Chapter 4 presents a further cross-country analysis of national economic growth rates given major changes in the concentration and availability of financial assets and liabilities and in domestic lending to the non-financial sector. This is followed by a look at the financial efficiency and sustainability of the economic growth models and practices currently favoured in emerging markets and advanced economies. Finally, the last part of the book is Chapter 5 in which the author derives main conclusions regarding the speed of economic growth, global capital flows, and changes in gross financial stocks over the first seventeen years of this century.