Emerging Economies and the Global Financial System: Post-Keynesian Analysis

IntroductionThe Post Keynesian contribution: A historical overviewAuthor contributions and plan of the bookNotesReferencesTwo post-Keynesian approaches to international finance: The compensation thesis and the cambist viewIntroductionThe compensation thesisThe compensation thesis revisitedThe cambist view and covered interest parityThe cambist view revisitedConclusionReferencesTrade versus capital flows: The key implicit and methodological differences between the Neoclassical and the Post Keynesian approaches to exchange rate determinationNeoclassical exchange rate theory(ies)Post Keynesian exchange rate theoryConclusionsNotesReferencesII Minsky, balance sheets and cyclesA Minskyan framework for the analysis of financial flows to emerging economiesLiterature reviewA Minskyan framework of international financial flowsand exchange rate dynamics in EMApplications of a Minskyan view of international financial flows and exchange rates: New forms of externalvulnerability and the implications of pension fundsinvestments in EEs NotesReferencesPost Keynesian and structuralist approaches to boom-bust cycles in emerging economiesBusiness cycles in EMEs: Structural features and stylised factsPost Keynesian and structuralist approaches to business cycles in EMEsReal-side focusModels with fixed exchange ratesFinancial-side focusModels with flexible exchange ratesReal-side focusFinancial-side focusDiscussion and conclusionNotesReferencesCost competitiveness and asset prices as determinants of the current account in emerging economiesThe determinants of the current account in different theoretical frameworksTrade-centred approachesNeo-Kaleckian distribution and growth modelsBalance-of-payments constrained growth modelsStructuralist modelsFinance-centred approachesMinskyan literatureA synthesis of trade- and finance-centred approachesEmpirical evidenceEmpirical evidence for trade-centred channelsEmpirical evidence for finance-centred channelsConclusionNotesReferencesSpace in Post Keynesian monetary economics: An exploration of the literatureOpen-economy, aspatial Keynesian approachesThe building blocks of a ‘real space’ approach to Post Keynesian theoryClosed-economy spatial Keynesian approachesOpen-economy spatial Keynesian approachesConclusionNotesReferencesIII Currency hierarchyEvolving international monetary and financial architecture and the development challenge: A liquidity preference theoreticalKeynes’ liquidity preference theory in a global settingThe global monetary order envisioned by KeynesEvolution of the global U.S. dollar order: Finance tamed at first, then (hyper-)globalisedGlobal financial crisis and its aftermath: The end of an era?(Hyper-)globalised finance and the developing world: Challenges and optionsNotesReferencesInternational money, privileges and underdevelopmentBasics of the monetary Keynesian approachA simple monetary Keynesian portfolio modelFactors which make a national currency an international oneTypes of currency hierarchiesThe future of the world currency systemNotesReferencesThe Post Keynesian view on exchange rates: Towards the consolidation of the different contributions in the ABM and SFC frameIntroductionThe PK exchange rate viewCentral economies’ exchange ratesPeripheral economies’ exchange ratesConclusionsReferencesA Post Keynesian framework for real exchange rate determination: An overviewConventional theoriesThe Post Keynesian framework for exchange rate determinationKeynes’ and Harvey’s theory and the currency hierarchy modelAsset choice under uncertainty and the exchange rateEME currencies and the hierarchical monetary systemEmpirical findingsReal exchange rate, economic growth and exchange rate policyConcluding remarksNotesReferencesIV Current account and growthThe Kaleckian theory of exchange ratesIntroductionProfits and the exchange rateTrade-determined exchange rates, economic development and corporate structureMoney capital flows and Fisher effectsDestabilising the world economyConclusionAcknowledgementsNoteReferencesFinancial liberalisation, exchange rate dynamics and the financial Dutch disease in developing and emerging economiesPortfolio inflows in a two-sector economy with a ‘speculative’ sectorPortfolio booms, exchange rate appreciation and medium-term financial cycles in developing and emerging countriesLong-run damages of temporary financial booms in developing countriesSome concluding policy implicationsNotesReferencesGlobal financial flows in Kaleckian models of growth and distribution: A surveyIntroductionThe (net) capital account makes its entryExternal debt sustainability and devaluationsExternal flows and financial instabilityGross financial flows, income distribution and growthNotesReferencesV Policy implicationsImplications of modern money theory on development financeIntroductionA critical examination of the mainstream approach of development financeModern money theory and development financeModern money theoryDevelopment banks and development financingFiscal spending and employer-of-the-last-resortConclusionNotesReferencesMonetary sovereignty in the Post Keynesian perspective: In the search of a conceptMonetary sovereignty: A multidisciplinary and controversial subjectThe MMT concept of monetary sovereigntyA Post Keynesian concept of monetary sovereigntyFinal remarksReferencesDealing with global financial asymmetry: Contributions of regional monetary cooperation between emerging markets and developIntroduction: Global financial asymmetries and restricted policy space for emerging markets and developing countriesTraditional optimal currency area theory falls short on regional monetary cooperation in EMDCRegional monetary cooperation as a policy tool for reducing economic volatilityDifferent forms of regional monetary cooperationReducing transaction costs of intra-regional trade: Regional payment systemsEnhancing regional shock buffering capacities: Regional financial arrangementsConclusionsNotesReferencesDe-regulation of finance in China and India: A Post-Keynesian analysisThe backgroundChina: From market-led reforms during the Deng Xiao Ping regime to the ‘China model’ and ‘new normal’ growth under Xi JinpingMarket-led reforms initiated by Deng Xiao PingChanges in leadership since 1992 and deviations from earlier market reformsChanges in exchange rate managementThe volatile stock marketDecelerating growth and financial instabilityIndia: On track of a de-regulated economy since the mid-EightiesDeregulated finance is no panacea for growth via efficient marketsNotesReferences
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