3. (a) What is meant when we read about "financial globalization"? b) From the standpoint of less developed countries seeking to improve their economic position, is financial globalization a good, bad or indifferent thing? In this regard, one of our readings says that:

"the welfare benefits of going from a situation without any capital mobility to a situation with completely free movement of capital is roughly equivalent to a one 3 per cent increase in consumption for a typical emerging economy.2 One reason for the comparatively small estimated gains is that the low level of labour productivity associated with a low income level seems not to be primarily the result of a lack of capital, but is dependent on other factors, such as poorly functioning institutions."

(c) Why is this remark largely beside the point? Explain.