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Norberg .
Agrees that stock market fluctuations are increasing and that the roller-coaster movement of the market, especially of dot-com share prices, shows exaggerated hopes and mistaken pricing. However, he contends that the reason for the fluctuations is not short-term thinking but the fact that the stock market is becoming even more focused on the long-term. He argues that increased market fluctuations are essentially in the new, more research intensive sectors, where long term sales are hard to predict. Therefore, any suggestion of future upturns or downturns will be felt swiftly (p 242). Moreover, Norberg points out that if one is to look at the market's behavior as a whole, share price fluctuations do not appear to have increased where traditional firms are concerned. (p242).
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My opinion.
However, Norberg has not provided any data to support his claim that share fluctuations have not increased where traditional firms are concerned. .
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Third issue - hypercapitalism.
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Opponents of globalization.
Removal of statutory restrictions on capital account transactions as a result of economic degulation in both industrial and developing countries, growth of derivative financial instruments which has permitted international investors to assume some risks while limiting their exposure to others, and advances in information and communication technologies has revolutionized the financial industry so that 1.5 trillion dollars cross national borders every day.
When international capital flows out of a country suddenly, it can precipitate a crisis, particularly if they involve sovereign debt and banking and financial system debt (E&M, 5) .
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Norberg .
Contends that free movement of capital is good because:.
It gives people freedom to do whatever they wish with their own resources, eg, Americans can invest their pension funds wherever they wish to do so.
It provides businesses the liberty to seek financing in other countries.
