Academic

While we're on the subject of the would-be governors of financial globalization, let me point you to Frederic Mishkin's anodyne defense of the phenomenon and Dani Rodrik's latest critique of it.  Mishkin is the newest member of the Federal Reserve, and it means that his speech is pretty rah-rah and yet check-it-with-the-boss bland, but check it out if you want the pleasant basics.  Rodrik's editorial says this:

It is time for a new model of financial globalisation, one that recognises that more is not necessarily better. As long as the world economy remains politically divided among different sovereign and regulatory authorities, global finance is condemned to suffer deformations far worse than those of domestic finance. Depending on context, the appropriate role of policy will be as often to stem the tide of capital flows as to encourage them.

I'll mildy suggest that Rodrik - the skeptic of all things global - seems to be animated by a particular interest in certainty, or an inclination that the traumas of creative destruction and financial crises on the workers who exchanged free trade commitments for a social safety net ought to be avoided.  Or at least he is when he's thinking about the developed world.  I could be misreading him, though, and he doesn't appear to be interested in placidity in the economic programs of developing countries.  Anyway, the editorial isn't just a wringing of hands.  He and Arvind Subramanian propose two globalization countermeasures:

First, some variant of petrol tax in the main oil-importing countries (including the US, China and India) is essential to cut demand and reduce oil prices and hence the current account surpluses of oil exporters. That such measures should be taken for environmental reasons or that they would reduce the size of sovereign wealth funds only adds to their attractiveness. Second, some appreciation of east Asian currencies is necessary to reduce their surpluses. Even though undervaluation is a potent instrument for promoting growth in low-income countries in general, at this juncture self-interest on both sides calls for an orderly unwinding of current account imbalances.

This appreciation can be achieved either unilaterally or, if necessary, multilaterally through the World Trade Organisation, as a recent Peterson Institute paper has proposed.

Hat tip: Dingel.