This thesis studies the effects of financial globalization on macroeconomic policy outcomes. The first chapter studies the effect of equity market liberalization on monetary policy transmission to asset markets in the United Kingdom. The findings suggests that the asset market channel of monetary policy became weaker after liberalization. The second chapter analyzes the recent improvement in variable underlying sovereign debt crisis in emerging market economies. This improvement could be due to either benign external financial conditions or better domestic macroeconomic policies. The findings suggests that most of the improvement was a result of benign external financial conditions. The third paper examines the recent development of local currency bond markets in developing economies. While denominating foreign debt in domestic currency may delegate the currency risk to foreign investors, the findings of the final chapter suggests that the trade-off is the attraction of investors with significantly lower risk aversion