One of the central premises of the literature on financialisation is that we have been living in a new era of capitalism, characterised by a historical shift in the finance-production nexus. Finance has expanded to a disproportionate economic size and, more importantly, has divorced from productive economic pursuits. In this paper, we explore these claims of ‘expansion’ and ‘divorce’ based on a longue durée analysis of the link between finance and production in Senegal and Ghana. As such, we de-centre the dominant approach to financialisation. Seen from the South, we argue that although there has been expansion of financial motives and practices the ‘divorce’ between the financial and the productive economy cannot be considered a new empirical phenomenon having occurred during the last decades and even less an epochal shift of the capitalist system. The tendency for finance to neglect the needs of the domestic productive sector has been the structural operation of finance in many parts of the Global South over the last 150 years. Therefore, one cannot put forward a theory of the evolution of finance under capitalism without taking these crucial historical insights into account.
{"title":"Beyond financialisation: the longue durée of finance and production in the Global South","authors":"Kai Koddenbrock, I. Kvangraven, N. Sylla","doi":"10.1093/cje/beac029","DOIUrl":"https://doi.org/10.1093/cje/beac029","url":null,"abstract":"\u0000 One of the central premises of the literature on financialisation is that we have been living in a new era of capitalism, characterised by a historical shift in the finance-production nexus. Finance has expanded to a disproportionate economic size and, more importantly, has divorced from productive economic pursuits. In this paper, we explore these claims of ‘expansion’ and ‘divorce’ based on a longue durée analysis of the link between finance and production in Senegal and Ghana. As such, we de-centre the dominant approach to financialisation. Seen from the South, we argue that although there has been expansion of financial motives and practices the ‘divorce’ between the financial and the productive economy cannot be considered a new empirical phenomenon having occurred during the last decades and even less an epochal shift of the capitalist system. The tendency for finance to neglect the needs of the domestic productive sector has been the structural operation of finance in many parts of the Global South over the last 150 years. Therefore, one cannot put forward a theory of the evolution of finance under capitalism without taking these crucial historical insights into account.","PeriodicalId":48156,"journal":{"name":"Cambridge Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-08-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47499768","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using the example of Russia, we argue that financialisation in an authoritarian state can take place primarily through formation in financial sector monopoly-like state-related structures controlled by a limited circle of the irreplaceable elite. It occurs because financialisation and new financial technologies in an authoritarian state increase both the opportunities and incentives for dominance of large state-dependent institutions in the financial sector. The authoritarian state and its elite are using financial and information technology developments in accordance with their goals, adopting and enhancing some financial practices and innovations from the experience of developed countries while rejecting, distorting or slowing down others. As a result, on the one hand, within the framework of the formation of such monopoly-like institutions, financialisation is proceeding actively, the role of finance and financial relations in society is increasing everywhere and the use of new financial technologies, digitalisation and financial inclusion are expanding. On the other hand, some financial markets remain underdeveloped because either they imply a certain degree of competition, diversity, institutional quality and independence from state voluntarism, or the state and authoritarian elite have not yet fully elaborated a strategy of integrating these financial markets into the orbit of their interests. Thus financialisation in DEEs with an authoritarian political regime can strengthen and facilitate the dominance of authoritarian elites. We draw these conclusions considering the example of financialisation in Russia in the last two decades, where the banking sector is at the core of the financial system.
{"title":"Financialisation and the authoritarian state: the case of Russia","authors":"A. Mishura, S. Ageeva","doi":"10.1093/cje/beac038","DOIUrl":"https://doi.org/10.1093/cje/beac038","url":null,"abstract":"\u0000 Using the example of Russia, we argue that financialisation in an authoritarian state can take place primarily through formation in financial sector monopoly-like state-related structures controlled by a limited circle of the irreplaceable elite. It occurs because financialisation and new financial technologies in an authoritarian state increase both the opportunities and incentives for dominance of large state-dependent institutions in the financial sector. The authoritarian state and its elite are using financial and information technology developments in accordance with their goals, adopting and enhancing some financial practices and innovations from the experience of developed countries while rejecting, distorting or slowing down others. As a result, on the one hand, within the framework of the formation of such monopoly-like institutions, financialisation is proceeding actively, the role of finance and financial relations in society is increasing everywhere and the use of new financial technologies, digitalisation and financial inclusion are expanding. On the other hand, some financial markets remain underdeveloped because either they imply a certain degree of competition, diversity, institutional quality and independence from state voluntarism, or the state and authoritarian elite have not yet fully elaborated a strategy of integrating these financial markets into the orbit of their interests. Thus financialisation in DEEs with an authoritarian political regime can strengthen and facilitate the dominance of authoritarian elites. We draw these conclusions considering the example of financialisation in Russia in the last two decades, where the banking sector is at the core of the financial system.","PeriodicalId":48156,"journal":{"name":"Cambridge Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-08-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44528804","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article analyses the effects of financialisation on non-financial companies’ (NFCs) investment and explores the interactions between financialisation and the structural and institutional features of developing and emerging economies (DEEs). We estimate the effects of financialisation on physical investment for a sample of DEEs using panel data based on the balance sheets of publicly listed NFCs. Our main contribution is to assess the interactions between the financialisation of the NFCs and country-level financial development, financial reform, capital account openness and global value chain participation. We find that the effects of the financialisation of the NFCs in DEEs are highly context specific. Stock market development, financial reforms for liberalisation, capital account openness and participation in the global value chains are associated with more pronounced negative effects of financialisation on investment. Our analysis provides novel empirical evidence regarding the sources of variation in the financialisation of corporations in DEEs.
{"title":"Financialisation and firm-level investment in developing and emerging economies","authors":"D. Tori, Özlem Onaran","doi":"10.1093/cje/beac030","DOIUrl":"https://doi.org/10.1093/cje/beac030","url":null,"abstract":"\u0000 This article analyses the effects of financialisation on non-financial companies’ (NFCs) investment and explores the interactions between financialisation and the structural and institutional features of developing and emerging economies (DEEs). We estimate the effects of financialisation on physical investment for a sample of DEEs using panel data based on the balance sheets of publicly listed NFCs. Our main contribution is to assess the interactions between the financialisation of the NFCs and country-level financial development, financial reform, capital account openness and global value chain participation. We find that the effects of the financialisation of the NFCs in DEEs are highly context specific. Stock market development, financial reforms for liberalisation, capital account openness and participation in the global value chains are associated with more pronounced negative effects of financialisation on investment. Our analysis provides novel empirical evidence regarding the sources of variation in the financialisation of corporations in DEEs.","PeriodicalId":48156,"journal":{"name":"Cambridge Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45482132","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The lack of financing options for African firms has led to a reappraisal of the role National Development Banks (NDBs) can play in promoting structural transformation the region. Through an analysis of bank data and policy reports, I argue that the focus on corruption by the mainstream to explain the lacklustre performance of NDBs in developing and emerging economies is overemphasised. Specifically, such arguments fail to account for underlying structural and relational asymmetries between financial sector participants, which make it difficult for NDBs to accomplish their mission. In Côte d’Ivoire, these constraints are characterised by a monetary system inherited from the colonial period that prioritises exchange rate stability over credit creation. The increasing push by International Financial Institutions to commercialise state banking is also causing the main Ivorian NDB (the Banque Nationale d’Investissement) to prioritise financial intermediation over the provision of credit to enterprises in productive sectors.
非洲企业缺乏融资选择，导致人们重新评估国家开发银行在促进该地区结构转型方面所能发挥的作用。通过对银行数据和政策报告的分析，我认为，在解释发展中国家和新兴经济体的新开发银行表现不佳时，主流对腐败的关注被过分强调了。具体而言，这些论点未能解释金融部门参与者之间潜在的结构性和关系不对称，这使得新开发银行难以完成其使命。在Côte科特迪瓦，这些限制的特点是继承自殖民时期的货币体系，优先考虑汇率稳定而不是信贷创造。国际金融机构日益推动国有银行业务商业化，这也导致主要的科特迪瓦国家投资银行(Banque Nationale d’investssement)将金融中介置于向生产部门企业提供信贷的优先地位。
{"title":"A financial straitjacket? Côte d’Ivoire’s National Development Banks","authors":"G. Quist","doi":"10.1093/cje/beac034","DOIUrl":"https://doi.org/10.1093/cje/beac034","url":null,"abstract":"\u0000 The lack of financing options for African firms has led to a reappraisal of the role National Development Banks (NDBs) can play in promoting structural transformation the region. Through an analysis of bank data and policy reports, I argue that the focus on corruption by the mainstream to explain the lacklustre performance of NDBs in developing and emerging economies is overemphasised. Specifically, such arguments fail to account for underlying structural and relational asymmetries between financial sector participants, which make it difficult for NDBs to accomplish their mission. In Côte d’Ivoire, these constraints are characterised by a monetary system inherited from the colonial period that prioritises exchange rate stability over credit creation. The increasing push by International Financial Institutions to commercialise state banking is also causing the main Ivorian NDB (the Banque Nationale d’Investissement) to prioritise financial intermediation over the provision of credit to enterprises in productive sectors.","PeriodicalId":48156,"journal":{"name":"Cambridge Journal of Economics","volume":"1 1","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-07-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41508115","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The contribution of this paper is to discuss the particularities of financialisation in peripheral economies, emphasising the channels through which financialisation contributes to redefining their trajectory of structural change. This paper has, as a reference, the structural regression of the Brazilian case, which is characterised by the deindustrialisation and trade specialisation marked by export reprimarisation. The aspects covered are the financialisation of non-financial corporations, of the exchange rate and of the determination of the commodity prices, which are associated with the Dutch disease.
{"title":"Connecting financialisation and structural change: a critical appraisal regarding Brazil","authors":"Mariana Finello Corrêa, Carmem Feijó","doi":"10.1093/cje/beac036","DOIUrl":"https://doi.org/10.1093/cje/beac036","url":null,"abstract":"\u0000 The contribution of this paper is to discuss the particularities of financialisation in peripheral economies, emphasising the channels through which financialisation contributes to redefining their trajectory of structural change. This paper has, as a reference, the structural regression of the Brazilian case, which is characterised by the deindustrialisation and trade specialisation marked by export reprimarisation. The aspects covered are the financialisation of non-financial corporations, of the exchange rate and of the determination of the commodity prices, which are associated with the Dutch disease.","PeriodicalId":48156,"journal":{"name":"Cambridge Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-07-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48398738","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Many studies attempted to measure the degree of financialisation of an economy, generally on a country-by-country basis, given the heterogeneity of indicators and data availability. In this paper, a simple but common measure of financialisation of non-financial corporations (NFCs) is developed, namely, the participation of services provided by the financial sector (both directly and indirectly) on their value-added creation process, inspired by the methodology developed by Dávila-Fernández and Punzo (2020). To do this, we use the inter-country input-output (ICIO) matrices built by the OECD, which allow us to understand the role played by the financial sector (local or foreign) in the ‘value-added production function’ of NFCs from 45 industries, in 67 countries for the period 1995–2018. We find three main stylised facts. First, the financial sector plays a relevant role in the value-added creation process of NFCs, and its importance has increased during the last years, although there is high diversity among countries. Second, this process has been heterogeneous when different productive sectors are considered. Primary industries evidenced a low degree of financialisation, while manufacturing and the service sector generally presented a higher reliance on finance. Third, between 1995 and the global financial crisis, NFCs increased their dependence on foreign financial value-added, followed by a partial reversion of this process. Moreover, the origin of these exports of financial services changed: while some traditional financial hubs such as the UK, Switzerland and Japan decreased their importance as providers of financial value-added to NFCs, China, Russia and India became important global players.
{"title":"An international multi-sectoral approach to financialisation","authors":"Matías Torchinsky Landau","doi":"10.1093/cje/beac025","DOIUrl":"https://doi.org/10.1093/cje/beac025","url":null,"abstract":"\u0000 Many studies attempted to measure the degree of financialisation of an economy, generally on a country-by-country basis, given the heterogeneity of indicators and data availability. In this paper, a simple but common measure of financialisation of non-financial corporations (NFCs) is developed, namely, the participation of services provided by the financial sector (both directly and indirectly) on their value-added creation process, inspired by the methodology developed by Dávila-Fernández and Punzo (2020). To do this, we use the inter-country input-output (ICIO) matrices built by the OECD, which allow us to understand the role played by the financial sector (local or foreign) in the ‘value-added production function’ of NFCs from 45 industries, in 67 countries for the period 1995–2018. We find three main stylised facts. First, the financial sector plays a relevant role in the value-added creation process of NFCs, and its importance has increased during the last years, although there is high diversity among countries. Second, this process has been heterogeneous when different productive sectors are considered. Primary industries evidenced a low degree of financialisation, while manufacturing and the service sector generally presented a higher reliance on finance. Third, between 1995 and the global financial crisis, NFCs increased their dependence on foreign financial value-added, followed by a partial reversion of this process. Moreover, the origin of these exports of financial services changed: while some traditional financial hubs such as the UK, Switzerland and Japan decreased their importance as providers of financial value-added to NFCs, China, Russia and India became important global players.","PeriodicalId":48156,"journal":{"name":"Cambridge Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-07-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42464629","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, we discuss the process of financialisation of developing countries and emerging economies (DEEs) from the perspective of critical realism (CR). We argue that the emergence of financialisation depends on the inherent tendency of the imbalance between the accumulation of productive and financial capital being actualised, and emphasise how government’s intentional actions under current social structures relate to this process. We use China as a case study to illustrate how DEEs can resist financialisation and maintain productive accumulation during development. We elaborate on various institutional and policy adjustments undertaken by China during different phases that promoted productive accumulation and how China avoided financialisation for much of its growth period. Our discussion helps to explain why China’s limited financialisation compared to other DEEs who experienced financialisation featured by dependency. We conclude by highlighting new potential risks and sources of financialisation faced by the Chinese economy.
{"title":"Financialisation of developing and emerging economies and China’s experience: how China resists financialisation","authors":"Fusheng Xie, Xiaolu Kuang, Zhi Li","doi":"10.1093/cje/beac037","DOIUrl":"https://doi.org/10.1093/cje/beac037","url":null,"abstract":"\u0000 In this paper, we discuss the process of financialisation of developing countries and emerging economies (DEEs) from the perspective of critical realism (CR). We argue that the emergence of financialisation depends on the inherent tendency of the imbalance between the accumulation of productive and financial capital being actualised, and emphasise how government’s intentional actions under current social structures relate to this process. We use China as a case study to illustrate how DEEs can resist financialisation and maintain productive accumulation during development. We elaborate on various institutional and policy adjustments undertaken by China during different phases that promoted productive accumulation and how China avoided financialisation for much of its growth period. Our discussion helps to explain why China’s limited financialisation compared to other DEEs who experienced financialisation featured by dependency. We conclude by highlighting new potential risks and sources of financialisation faced by the Chinese economy.","PeriodicalId":48156,"journal":{"name":"Cambridge Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-07-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48673548","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The world region is missing from financialisation analysis of emerging economies (EEs) with little attention given to regional commonalities or comparative analysis across regions. This article sets out to identify regional commonalities in financialisation experiences across EEs, rooted in domestic institutions and countries’ varying integration into the global financial system. Bringing commonalities within and differences between emerging regions to the fore will help us understand the specificities of their political economies and current capitalist experiences. Based on existing research and data availability, six financialisation indicators across five macroeconomic aggregates are identified. Considering 2008–17, a ranking emerges with the most affected region being Central Easter Europe (CEE), followed by Latin America. Emerging Asia takes an intermediate position while EEs in the Middle East and North Africa (MENA) region and Africa show limited signs of financialisation. Our analysis identifies distinct regional features. Financialisation in CEE and Latin America is strongly driven by external forces, the key difference being the role that large domestic capitalists play in the process. Across Emerging Asia, financialisation has mainly unfolded in the private sector while state authorities could to some extent insulate public policy. In MENA, much of the private sector appears outside of the reach of financialisation because of the economic and political power of regional conglomerates. In emerging Africa, the phenomenon is concentrated in very few, if intensely affected, financialisation centres. From a theoretical perspective, we find financialisation is driven by a mix of external factors and domestically influential capitalist elites pursuing their interests.
{"title":"The regional distinctiveness and variegation of financialisation in emerging economies","authors":"E. Karwowski","doi":"10.1093/cje/beac033","DOIUrl":"https://doi.org/10.1093/cje/beac033","url":null,"abstract":"\u0000 The world region is missing from financialisation analysis of emerging economies (EEs) with little attention given to regional commonalities or comparative analysis across regions. This article sets out to identify regional commonalities in financialisation experiences across EEs, rooted in domestic institutions and countries’ varying integration into the global financial system. Bringing commonalities within and differences between emerging regions to the fore will help us understand the specificities of their political economies and current capitalist experiences. Based on existing research and data availability, six financialisation indicators across five macroeconomic aggregates are identified. Considering 2008–17, a ranking emerges with the most affected region being Central Easter Europe (CEE), followed by Latin America. Emerging Asia takes an intermediate position while EEs in the Middle East and North Africa (MENA) region and Africa show limited signs of financialisation. Our analysis identifies distinct regional features. Financialisation in CEE and Latin America is strongly driven by external forces, the key difference being the role that large domestic capitalists play in the process. Across Emerging Asia, financialisation has mainly unfolded in the private sector while state authorities could to some extent insulate public policy. In MENA, much of the private sector appears outside of the reach of financialisation because of the economic and political power of regional conglomerates. In emerging Africa, the phenomenon is concentrated in very few, if intensely affected, financialisation centres. From a theoretical perspective, we find financialisation is driven by a mix of external factors and domestically influential capitalist elites pursuing their interests.","PeriodicalId":48156,"journal":{"name":"Cambridge Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-07-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48520650","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper assesses whether there is evidence of an asymmetric relationship between the global liquidity cycle and the currencies of developing and emerging economies (DEEs), a central tenet of the Minskyan interpretation of the exchange rate behaviour in these economies and the ‘financialisation in developing and emerging economies’ literature. We use a novel panel model technique that incorporates asymmetric components to fixed-effects regressions to check if there is evidence of such asymmetry. Our results suggest that capital flows, commodity prices and the VIX have a more substantial relationship with the currencies of DEEs during the retrenchment of the global liquidity cycle than during its expansionist phase. In other words, our results suggest that the currencies of DEEs take the stairs up and the elevator down.
{"title":"Up the stairs, down in the elevator? The asymmetric response of emerging market currencies to the global liquidity cycle","authors":"J. Macalós, P. Rossi","doi":"10.1093/cje/beac026","DOIUrl":"https://doi.org/10.1093/cje/beac026","url":null,"abstract":"\u0000 This paper assesses whether there is evidence of an asymmetric relationship between the global liquidity cycle and the currencies of developing and emerging economies (DEEs), a central tenet of the Minskyan interpretation of the exchange rate behaviour in these economies and the ‘financialisation in developing and emerging economies’ literature. We use a novel panel model technique that incorporates asymmetric components to fixed-effects regressions to check if there is evidence of such asymmetry. Our results suggest that capital flows, commodity prices and the VIX have a more substantial relationship with the currencies of DEEs during the retrenchment of the global liquidity cycle than during its expansionist phase. In other words, our results suggest that the currencies of DEEs take the stairs up and the elevator down.","PeriodicalId":48156,"journal":{"name":"Cambridge Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47427554","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Aiming at analysing the constraints to economic development, the article takes as reference the classic Economic Commission for Latin America and the Caribbean (ECLAC) approach to centre–periphery relations and seeks to update it from two points of view: adding the new historical context of the financialisation of capitalism and highlighting the new format and operation of the International Monetary System (IMS). The article’s objective is thus analysing the effects of financialisation on the IMS, emphasising the hierarchies of this system and its consequences for the economic dynamic of centre and peripheral countries. The main hypothesis is that financialisation has produced changes in cross-border capital flows, but also – and chiefly – in the ‘nature’ of the key-currency of the IMS. As a consequence, the exorbitant privilege of the reserve currency issuing country reaches a paroxysm, while peripheral countries are victims of a ‘compulsory duty’.
{"title":"Exorbitant privilege and compulsory duty: the two faces of the financialised IMS","authors":"Ricardo Carneiro, B. De Conti","doi":"10.1093/cje/beac027","DOIUrl":"https://doi.org/10.1093/cje/beac027","url":null,"abstract":"\u0000 Aiming at analysing the constraints to economic development, the article takes as reference the classic Economic Commission for Latin America and the Caribbean (ECLAC) approach to centre–periphery relations and seeks to update it from two points of view: adding the new historical context of the financialisation of capitalism and highlighting the new format and operation of the International Monetary System (IMS). The article’s objective is thus analysing the effects of financialisation on the IMS, emphasising the hierarchies of this system and its consequences for the economic dynamic of centre and peripheral countries. The main hypothesis is that financialisation has produced changes in cross-border capital flows, but also – and chiefly – in the ‘nature’ of the key-currency of the IMS. As a consequence, the exorbitant privilege of the reserve currency issuing country reaches a paroxysm, while peripheral countries are victims of a ‘compulsory duty’.","PeriodicalId":48156,"journal":{"name":"Cambridge Journal of Economics","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43365891","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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