Global Economic Relations between Europe, Japan and the USA

What is changing most in our world is the increasing interdependency of national economies. Since World War II, the volume of world trade has grown faster than world output. More recently, international capital transactions have been liberalized in many countries, thus leading to an increasing integration of financial markets. International capital transactions have been growing much faster than real transactions in goods and services. For instance, in the Netherlands gross non-monetary cross-border capital transactions increased from 16 per cent of national income in 1980 to more than 67 per cent in 1987. Financial markets react much faster than real markets to changes in economic policy and fundamentals. Therefore, the worldwide financial integration has enhanced the global interdependence of national economies.