Financialisation and Development: how can emerging economies catch up?

Guizzo, Danielle and Strachman, Eduardo and Dalto, Fabiano and Feijo, Carmem (2018): Financialisation and Development: how can emerging economies catch up?

Abstract

The influences of financialisation over emerging economies have drawn significant attention on whether these nations are able or not to overcome its constraints and promote satisfactory development levels. The possibilities for overcoming financial dominance, however, deserve further attention on what concerns its structural causes and policy alternatives. This article has two objectives. First, it formalises three key characteristics behind the financialisation of developing economies, focusing on some key elements that differentiate financialisation in developed versus emerging economies: interest rate behaviour; exchange rate volatility and balance of payments dominance. Secondly, it discusses some strategies for developing countries to overcome the effects of financialisation based on the hypothesis of increasing policy space, which allows these economies to retain autonomy on their macroeconomic policies and to conduct domestic policies in an integrated scenario

• Item Type: MPRA Paper
• Language: English
• Keywords: Financialisation, Developing Countries; Interest Rate; Exchange Rate; Policy Space
• Subjects: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E61 - Policy Objectives ; Policy Designs and Consistency ; Policy Coordination

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