Cohen, Joseph N. (2008): Managing the Faustian bargain: monetary autonomy in the pursuit of development in Eastern Europe and Latin America.
Download (944kB) | Preview
International capital markets have grown to be a major force shaping today's world economy, presenting a range of opportunities and threats to developing countries. Capital market liberalization created large pools of much-needed capital that developing economies could access, but tapping these funds often came at the cost of increasing economic vulnerability, lost policy-making autonomy and a range of structural distortions that could ultimately undermine development in the long-term. As the potential threats of integrating one's country into global capital markets has become apparent, countries have devised a range of strategies to buffer themselves from the strains of global capital markets. This article considers the pursuit of monetary autonomy with reference to a typology of the strategies that policy-makers can use to open their markets to international capital, while simultaneously attempting to buffer themselves from the economic and political pressures of global financial integration. Such autonomy can be purchased in a myriad of ways, and a discussion of the choices facing Latin American and Eastern European countries is presented.
|Item Type:||MPRA Paper|
|Original Title:||Managing the Faustian bargain: monetary autonomy in the pursuit of development in Eastern Europe and Latin America|
|Keywords:||capital market liberalization; monetary autonomy; financial policy; financial system stability|
|Subjects:||F - International Economics > F3 - International Finance > F32 - Current Account Adjustment ; Short-Term Capital Movements
F - International Economics > F5 - International Relations, National Security, and International Political Economy > F59 - Other
F - International Economics > F0 - General > F02 - International Economic Order and Integration
F - International Economics > F3 - International Finance > F33 - International Monetary Arrangements and Institutions
|Depositing User:||Joseph N. Cohen|
|Date Deposited:||03. May 2010 00:18|
|Last Modified:||13. Feb 2013 23:05|
Andrews, David M. 1994. "Capital Mobility and State Autonomy: Toward a Structural Theory of International Monetary Relations." International Studies Quarterly 38:193 - 218.
Annett, Anthony, and Albert Jaeger. 2004. "Europe's Quest for Financial Discipline: Will the Stability and Growth Pact Help Europe Find the Right Balance Between Fiscal Discipline and Flexibility." Finance and Development:22 - 25.
Armijo, Leslie Elliott, and Philippe Faucher. 2002. ""We Have a Consensus": Explaining Political Support for Market Reforms in Latin America." Latin American Politics and Society 44:1 - 40.
Bank for International Settlements. 2005. "Triennial Central Bank Survey: Foreign exchange and derivatives market activity in 2004." Basel: Bank for International Settlements.
Belke, Ansgar, and Daniel Gros. 2002. "Monetary Integration in the Southern Cone: Mercosur is not like the EU?" Central Bank of Chile Working Papers No. 188. Santiago: Central Bank of Chile.
Block, Fred. 1977. The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present. Berkeley: University of California Press.
Bordo, Michael D. 1993. "The Bretton Woods International Monetary System: A Historical Overview." Pp. 3 - 98 in A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform, edited by Michael D. Bordo and Barry Eichengreen. Chicago: University of Chicago Press.
Bruton, Henry J. 1998. "A Reconsideration of Import Substitution." Journal of Economic Literature 36:903 - 936.
Cohen, Benjamin J. 2006. "The Macrofoundations of Monetary Power." Pp. 31 - 50 in International Monetary Power, edited by David M. Andrews. Ithaca, NY: Cornell University Press.
Cohen, Joseph Nathan. 2008. "Financial Capitalism's Elusive Quest: Macrofinancial Autonomy and Economic Growth in the Developing World, 1990 - 2005." Unpublished Manuscript.
Cohen, Joseph Nathan, and Miguel Angel Centeno. 2006. "Neoliberalism and Patterns of Economic Performance, 1980 - 2000." Annals of the American Academy of Political and Social Science 606:32 - 67.
Corbo, Vittorio, and Klaus Schmidt-Hebbel. 2001. "Inflation Targeting in Latin America." Central Bank of Chile Working papers No. 105. Santiage: Central Bank of Chile.
Dooley, Michael P., David Folkerts-Landau, and Peter Garber. 2003. "An Essay on the Revived Bretton Woods System." NBER Working Paper No. 9971. Cambridge, MA: National Bureau of Economic Research.Dooley, Michael P.,
David Folkerts-Landau, and Peter Garber. 2004. "The Revived Bretton Woods System: The Effects of Periphery Intervention and Reserve Management on Interest Rates and Exchange Rates in Center Countries." NBER Working Paper No. 10332. Cambridge, MA: National Bureau of Economic Research.
Dornbusch, Rudiger. 1998. "Capital Controls: An Idea Whose Time Has Passed." in Should the IMF Pursue Capital-Account Convertibility? Essays in International Finance No. 207, edited by Stanley Fischer, Richard N. Cooper, Rudiger
Dornbusch, Peter M. Garber, Carlos Massad, Jacques J. Polak, Dani Rodrik, and Savak S. Tarapore. Princeton, NJ: Princeton University.
Dreher, Axel. 2008. "IMF Conditionality: Theory and Evidence." KOF Working Papers No. 188. Zurich: Swiss Federal Institute of Technology.
Edwards, Sebastian. 2006. "Monetary Unions, External Shocks, and Economic Performance: A Latin American Perspective." NBER Working Paper No. 12229. Cambridge, MA: National Bureau of Economic Research.
Feldstein, Martin. 1999. "Self-Protection for Emerging Market Economies." NBER Working Paper No. 6907. Cambridge, MA: National Bureau of Economic Research.
Fischer, Christoph. 2007. "An Assessment of the Trends in International Price Competitiveness among EMU Countries." Discussion Paper Series 1: Economic Studies, No. 08/2007. Frankfurt: Deutche Bundesbank.
Frankel, Jeffrey. 2005. "Real Convergence and Euro Adoption in Central and Eastern Europe: Trade and Business Cycle Correlations as Endogenous Criteria for Joining the EMU." Pp. 9 - 21 in Euro Adoption in Central and Eastern Europe, edited by Susan Schadler. Washington, DC: International Monetary Fund.
Fratzscher, Marcel. 2003. "On Currency Crises and Contagion." International Journal of Finance and Economics 8:109 - 129.
Haggard, S., and S. Maxfield. 1996. "The political economy of financial internationalization in the developing world." International Organization 50:35-&.
Healy, Paul M., and Krisha G. Palepu. 2003. "The Fall of Enron." Journal of Economic Perspectives 17:3 - 26.
Helleiner, Eric. 1994. States and the Reemergence of Global Finance: From Bretton Woods to the 1990s. Ithaca, NY: Cornell University Press.
Hochreither, Eduard, Klaus Schmidt-Hebbel, and Winckler. 2002. "Monetary Union: European Lessons, Latin American Prospects." Central Bank of Chile Working Papers No. 167. Santiago: Central Bank of Chile.
International Monetary Fund. 2008. "Time Series Data on International Reserves and Foreign Currency Liquidity: Official Reserve Assets." Washington, DC: International Monetary Fund.
Isard, Peter. 2005. Globalization and the International Financial System: What's Wrong and What can be Done. New York: Cambridge University Press.
Kaminsky, Graciela, and Carmen Reinhart. 2000. "On Crises, Contagion and Confusion." Journal of International Economics 51:145 - 168.
Kirshner, Jonathan. 1995. Currency and Coercion: The Political Economy of International Monetary Power. Princeton: Princeton University Press.
Kirshner, Jonathan. 2006. "Currency and Coercion in the Twenty-First Century." Pp. 139 - 160 in International Monetary Power, edited by David M. Andrews. Ithaca, NY: Cornell University Press.
Kose, M. Ayhan, Eswar Prasad, Kenneth Rogoff, and Shang-Jin Wei. 2006. "Financial Globalization: A Reappraisal." IMF Staff Papers WP/06/189. Washington, DC: International Monetary Fund.
Krueger, Anne O. 1974. "The Political Economy of the Rent-Seeking Society." American Economic Review 64:291 - 303.
Labán M., Raúl, and Felipe Larraín B. 2001. "Can a Liberalization of Capital Outflows Increase Net Capital Inflows?: Latin America in the 1990s." Pp. 19 - 37 in Capital Flows, Capital Controls, and Currency Crises, edited by Felipe Larraín B. Ann Arbor: University of Michigan Press.
Mishkin, Frederic S., and Miguel A. Savastano. 2000. "Monetary Policy Strategies for Latin America." NBER Working Paper No 7617. Cambridge, MA: National Bureau of Economic Research.
Montiel, Peter, and Carmen Reinhart. 1999. "Do capital controls and macroeconomic policies influence the volume and composition of capital flows? Evidence from the 1990s." Journal of International Money and Finance 18:619 - 635.
Morales, Juan Antonio, and Jeffrey Sachs. 1989. "Bolivia's Economic Crisis." Pp. 57 - 80 in Developing Country Debt and the World Economy, edited by Jeffrey Sachs. Chicago: University of Chicago Press.
Obstfeld, Maurice. 1996. "Models of Currency Crises with Self-Fulfilling Features." European Economic Review.
Przeworski, Adam, and James Raymond Vreeland. 2000. "The Effect of IMF Programs on Economic Growth." Journal of Development Economics 62:385 - 421.
Rodrik, Dani, and Arvind Subramanian. 2008. "Why Did Financial Globalization Disappoint?" Cambridge, MA: Harvard University.
Ruggie, John Gerard. 1982. "International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order." International Organization 36:379 - 415.
Sachs, Jeffrey D., and Andrew Warner. 1995. "Economic Reform and the Process of Global Integration." Brookings Papers on Economic Activity 1995:1 - 95.
Schadler, Susan, Maria Carkovic, Adam Bennett, and Robert Khan. 1993. "Recent Experiences with Sruges in Capital Inflows." IMF Occasional Paper No. 108. Washington: International Monetary Fund.
Soederberg, Susanne. 2008. "‘Deconstructing the Official Treatment for “Enronitis”: The Sarbanes-Oxley Act and the Neoliberal Governance of Corporate America." Critical Sociology 34:657 - 680.
Taylor, Lance (Ed.). 2006. External Liberalization in Asia, Post-Socialist Europe, and Brazil. New York: Oxford University Press.
Thacker, Strom. 1999. "The High Politics of IMF Lending." World Politics 52:38 - 75.
Williamson, John. 1990. "What Washington Means by Policy Reform." in Latin American Adjustment: How Much Has Happened?, edited by John Williamson. Washington: Peterson Institute for International Economics.
Wypolsz, Charles. 2006. "European Monetary Union: The Dark Sides of a Major Success." Economic Policy:207 - 261.