Surviving the Great Capital Flood

Countries must set policies to handle global conditions, and one condition is large piles of money in some parts of the world. The countries and investors that hold large chunks of capital search for good investment opportunities – and increasingly the capital flows to emerging economies rather than developed nations. With the help of strong economic and political institutions, countries on the receiving end of such investments can establish policies to control financial globalization, suggest Simon Johnson and Jonathan Ostry of the International Monetary Fund for Project Syndicate. The IMF officials conclude: "The risk today is not imminent crisis, but rather that the capital flows arising from the global boom will not be well managed, leading to the buildup of vulnerabilities." Investors and receiving communities can agree on worthy purposes and work together to solve problems. – YaleGlobal