international stock market (7)

Encouragement of profitable ,productive firms and discouragement of poorly managed ,unproductive companies of source serve to improve the allocation of world resources .In the broad context of international monetary economic ,however ,the use of international stock transaction to improve capital allocation potentially comes at a price .This price ,especially if the stock transactions involve speculative behavior due to unfounded rumors and "band wagon" effects,is the increased volatility in world financial markets (and particularly in foreign exchange markets) that can occur.Thus far.we have in this blog on international bank deposits and lending ,international bond markets,and stock market activity in an international context .In overview ,these various asset markets ave been growing dramatically in size and scope in recent years.International investors now have open to them financial opportunities previously unavailable ,and the activity in these increasingly integrated markets has meant that countries are becoming linked ever more tightly together economically .the effects of financial developments in one country spill over into other countries , and the new environment poses challenges as well as opportunities for economic actors.