Summary of Breaking the Wall of Global Economic Crises

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Economics professor Hélène Rey explores how soaring global financial interconnectivity leaves little scope for nations to exercise independent monetary policies. Although Rey’s insightful, succinct analysis covers the problem more than the solutions, getAbstract believes policy makers, economists and investors will appreciate her thoughtful revelations on the consequences of an interconnected global economy.

In this summary, you will learn

  • How global capital flows have shifted since the late 19th century,
  • What the “Mundellian trilemma” reveals about the nature of macroeconomics and
  • How the free movement of capital is influencing the independence of countries’ monetary policies.

About the Speaker

Hélène Rey is a professor of economics at the London Business School.



The current period of robust international capital flows is not novel. Money crossed borders freely at the end of the 19th century. Before World War I, people could, via telephone, buy goods or invest in companies located anywhere in the world. Alas, two world wars and the Great Depression impeded financial globalization. The Bretton Woods period introduced capital controls, hindering the free flow of money. Thus, the world didn’t return to the 19th century’s levels of financial globalization until the 1980s or 1990s. Since then, other than a brief dip following the 2008 financial crisis, overseas capital flows have soared.

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