ABSTRACT
The putative decline of American hegemony is not just a matter of concern for Americans, but for all those who have benefited from nearly fifty years of almost uninterrupted economic growth and prosperity. The spread of manufacturing capability to war-ravaged Europe and Japan, and, later, the newly industrialized countries of the “Third World” gradually reduced American competitiveness in mass manufacturing industry. During the early 1980s stockmarket boom, American financial firms expanded to pursue opportunities abroad, establishing facilities and market presence worldwide. The international integration of financial markets has altered the context of national industrialization around the world. The relative neglect of international financial issues must be seen as a serious misallocation of academic resources within the field of international political economy. The growth of international financial markets has been accompanied by new ways of understanding the world economy. Cross-border financial flows and financial liberalization have had an impact on the stability of the world economy.
