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

Introduction The Post Keynesian contribution: A historical overview Author contributions and plan of the book Notes References Two post-Keynesian approaches to international finance: The compensation thesis and the cambist view Introduction The compensation thesis The compensation thesis revisited The cambist view and covered interest parity The cambist view revisited Conclusion References Trade versus capital flows: The key implicit and methodological differences between the Neoclassical and the Post Keynesian approaches to exchange rate determination Neoclassical exchange rate theory(ies)Post Keynesian exchange rate theory Conclusions Notes References II Minsky, balance sheets and cycles A Minskyan framework for the analysis of financial flows to emerging economies Literature review A Minskyan framework of international financial flowsand exchange rate dynamics in EM Applications of a Minskyan view of international financial flows and exchange rates: New forms of externalvulnerability and the implications of pension fundsinvestments in EEs Notes References Post Keynesian and structuralist approaches to boom-bust cycles in emerging economies Business cycles in EMEs: Structural features and stylised facts Post Keynesian and structuralist approaches to business cycles in EMEs Real-side focus Models with fixed exchange rates Financial-side focus Models with flexible exchange rates Real-side focus Financial-side focus Discussion and conclusion Notes References Cost competitiveness and asset prices as determinants of the current account in emerging economies The determinants of the current account in different theoretical frameworks Trade-centred approaches Neo-Kaleckian distribution and growth models Balance-of-payments constrained growth models Structuralist models Finance-centred approaches Minskyan literature A synthesis of trade- and finance-centred approaches Empirical evidence Empirical evidence for trade-centred channels Empirical evidence for finance-centred channels Conclusion Notes References Space in Post Keynesian monetary economics: An exploration of the literature Open-economy, aspatial Keynesian approaches The building blocks of a ‘real space’ approach to Post Keynesian theory Closed-economy spatial Keynesian approaches Open-economy spatial Keynesian approaches Conclusion Notes References III Currency hierarchy Evolving international monetary and financial architecture and the development challenge: A liquidity preference theoretical Keynes’ liquidity preference theory in a global setting The global monetary order envisioned by Keynes Evolution of the global U.S. dollar order: Finance tamed at first, then (hyper-)globalised Global financial crisis and its aftermath: The end of an era?(Hyper-)globalised finance and the developing world: Challenges and options Notes References International money, privileges and underdevelopment Basics of the monetary Keynesian approach A simple monetary Keynesian portfolio model Factors which make a national currency an international one Types of currency hierarchies The future of the world currency system Notes References The Post Keynesian view on exchange rates: Towards the consolidation of the different contributions in the ABM and SFC frame Introduction The PK exchange rate view Central economies’ exchange rates Peripheral economies’ exchange rates Conclusions References A Post Keynesian framework for real exchange rate determination: An overview Conventional theories The Post Keynesian framework for exchange rate determination Keynes’ and Harvey’s theory and the currency hierarchy model Asset choice under uncertainty and the exchange rate EME currencies and the hierarchical monetary system Empirical findings Real exchange rate, economic growth and exchange rate policy Concluding remarks Notes References IV Current account and growth The Kaleckian theory of exchange rates Introduction Profits and the exchange rate Trade-determined exchange rates, economic development and corporate structure Money capital flows and Fisher effects Destabilising the world economy Conclusion Acknowledgements Note References Financial liberalisation, exchange rate dynamics and the financial Dutch disease in developing and emerging economies Portfolio inflows in a two-sector economy with a ‘speculative’ sector Portfolio booms, exchange rate appreciation and medium-term financial cycles in developing and emerging countries Long-run damages of temporary financial booms in developing countries Some concluding policy implications Notes References Global financial flows in Kaleckian models of growth and distribution: A survey Introduction The (net) capital account makes its entry External debt sustainability and devaluations External flows and financial instability Gross financial flows, income distribution and growth Notes References V Policy implications Implications of modern money theory on development finance Introduction A critical examination of the mainstream approach of development finance Modern money theory and development finance Modern money theory Development banks and development financing Fiscal spending and employer-of-the-last-resort Conclusion Notes References Monetary sovereignty in the Post Keynesian perspective: In the search of a concept Monetary sovereignty: A multidisciplinary and controversial subject The MMT concept of monetary sovereignty A Post Keynesian concept of monetary sovereignty Final remarks References Dealing with global financial asymmetry: Contributions of regional monetary cooperation between emerging markets and develop Introduction: Global financial asymmetries and restricted policy space for emerging markets and developing countries Traditional optimal currency area theory falls short on regional monetary cooperation in EMDC Regional monetary cooperation as a policy tool for reducing economic volatility Different forms of regional monetary cooperation Reducing transaction costs of intra-regional trade: Regional payment systems Enhancing regional shock buffering capacities: Regional financial arrangements Conclusions Notes References De-regulation of finance in China and India: A Post-Keynesian analysis The background China: From market-led reforms during the Deng Xiao Ping regime to the ‘China model’ and ‘new normal’ growth under Xi Jinping Market-led reforms initiated by Deng Xiao Ping Changes in leadership since 1992 and deviations from earlier market reforms Changes in exchange rate management The volatile stock market Decelerating growth and financial instability India: On track of a de-regulated economy since the mid-Eighties Deregulated finance is no panacea for growth via efficient markets Notes References

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ISSUES IN THE GLOBAL FINANCIAL SYSTEM
Financial contagion refers to the spread of a financial crisis from one country or region to other countries or regions. Economic interdependence, an underpinning of globalization, increases the danger of financial contagion. Economic interdependence is generally viewed favorably because it creates a...
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China’s participation in the global financial system
This section offers a brief history of China’s engagement with international financial institutions. The first period of engagement was from 1949 to 1980 when China was for the most part isolated from the rest of the world, although, towards the end of the period, it was beginning to engage. The second...
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Global Financial Markets Integration: A Comparative Study Between Developed and Emerging Economies
Gaurav Agrawal Introduction Co-integration of global financial markets has turned out to be an appealing research issue after global financial crisis of 2007-2008. Co-integration of global financial markets is a frequently researched phenomenon in the finance and economics literature. Most of...
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Emerging Economies: Upward in International Monetary and Financial System
As is well known. World Bank and International Monetary Fund are the cornerstones of international monetary and financial system. As both have long been dominated by the United States of America, Europe, and other developed countries, their decision-making and operation represent the interest of developed...
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DEVELOPMENT OF A GLOBAL FINANCIAL MARKET ECONOMY
The contemporary financial exchange-based market economy that we live with is enduring a growth crisis. Relevant data are necessary to understand the scope and dimensions of historical and recent developments. Between 1970 and 2011, the gross domestic product (GDP) of the USA increased 15-fold, that...
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Global Financial Openness in the Advanced, Emerging and Developing Countries: A Brief Overview
In the preceding chapter, we presented an analysis of actual rates of economic growth, changes in relative economic standing, and financial openness for practically all of the 20 fastest-growing economies in the world from 2000 to 2014. Eighteen of these countries were developing economies (including...
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Compliance with the Global Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Regulation: Parameters and Paradoxes of Regulation in African Countries and Emerging Economies (AC/EEs)
Introduction Whilst African Countries (ACs) struggle with compliance with the AML/CFT regulations enunciated by the Financial Action Task Force (FATF), emerging economies (EEs) record better compliance levels. This is irrespective of the similar socio-economic and political challenges facing...
(Regulating and Combating Money Laundering and Terrorist Financing: The Law in Emerging Economies)
A Minskyan framework for the analysis of financial flows to emerging economies
Bruno Bonizzi and Annina Kaltenbrunner 1 Introduction This chapter contributes to our understanding of financial flows to emerging economies (EEs), and the motives behind it. It relates conceptually to existing Post Keynesian literature on financial flows and exchange rates (Harvey this volume,...
(Emerging Economies and the Global Financial System: Post-Keynesian Analysis)
Financial liberalisation, exchange rate dynamics and the financial Dutch disease in developing and emerging economies
Alberto Botta 1 Introduction Since the beginning of 1970s, neoliberal economists have emphasised financial and capital account liberalisation as necessary reforms to promote fast and sustainable growth in developing and emerging economies (DEEs henceforth). In their view, financial liberalisation...
(Emerging Economies and the Global Financial System: Post-Keynesian Analysis)
Dealing with global financial asymmetry: Contributions of regional monetary cooperation between emerging markets and develop
Contributions of regional monetary cooperation between emerging markets and developing countries Laurissa Muhlich and Barbara Fritz From a Keynesian—structuralist perspective, emerging markets and developing countries (EMDC) face disadvantages in the prevailing asymmetric global monetary and...
(Emerging Economies and the Global Financial System: Post-Keynesian Analysis)