ABSTRACT
Several types of international capital market volatility have been the focus of puzzlement and policy concern. The chapter considers several key questions that have been the focus of current debates, and attempt to summarize the evidence and issues. It considers include measuring the extent of international capital mobility, assessing the need for international financial standards, and/or national policies designed to affect the quantity or quality of international capital movements, and the choice of exchange rate regime. The chapter attempts to identify specifically Canadian interests and possible contributions. It addresses the specific issue of whether Canada would be better served by a flexible exchange rate, by an exchange rate pegged to the US dollar or some basket of currencies, or by adopting the US dollar or some North American generalization of it as the national currency. The chapter reviews a range of evidence showing that national boundaries continue to have strongly separating effects in economic and social space.
