ABSTRACT

The devastating consequences of currency crises across the world's economies have placed issues relating to capital mobility and exchange rates squarely at the forefront of international political economy. Speculative attacks have hit industrial and industrializing countries with equal force and without prejudice. It matters not that the United Kingdom, Mexico, Thailand, and Russia are different on scores of dimensions: their currencies all came under tremendous pressure from global capital in the I 990s. Some political economists argue that domestic economic vulnerability is a result of increased economic integration and capital mobility in the world economy. This third-image, or outside-in, explanation views international capital as a 'structural characteristic of the international system, similar to anarchy' (Keohane and Milner, 1996: 257).