ABSTRACT
Chapter 10 continues our discussion of macro-finance issues. In this chapter we consider the macro-structure of the global financial markets and their importance in promoting capital flows and economic growth. We then discuss the impact of key financial variables – including interest rates, inflation, and economic growth – on the markets, and analyze the effect of monetary policy on financial variables. We then consider elements of the financial markets that give rise to its fluidity and dynamism, including deregulation, capital mobility, volatility, and technology. We conclude by considering the practical impact of dynamic forces on the marketplace.
