But another explanation is simply that central banks around the world learned about the costs of inflationary policies after the experience of the 1970s. A more pessimistic view focuses on recent cases in which countries that opened up to global financial flows experienced massive borrowing and subsequent financial crises.
On this view, financial globalization may destabilize a country's economy in some circumstances and thereby make macroeconomic policy more difficult. However, I tend to believe that these financial crises often arise from macroeconomic policies that are inherently unstable and from private-sector participants who fail to recognize and price risk appropriately.