Chronic macro-economic and financial imbalances in the world economy: a meta-economic view

Vol. 35 No. 2 (2015)

Apr-Jun / 2015
Published April 1, 2015
PDF-English
PDF-English

How to Cite

Guttmann, Robert. 2014. “Chronic Macro-Economic and Financial Imbalances in the World Economy: A Meta-Economic View”. Brazilian Journal of Political Economy 35 (2):203-26. https://centrodeeconomiapolitica.org/repojs/index.php/journal/article/view/221.

Chronic macro-economic and financial imbalances in the world economy: a meta-economic view

Robert Guttmann
Professor of Economics, Hofstra University and Université Paris XIII.
Brazilian Journal of Political Economy, Vol. 35 No. 2 (2015), Apr-Jun / 2015, Pages 203-226

Abstract

Global finance, combining offshore banking and universal banks to drive a broader globalization process, has transformed the modus operandi of the world economy. This requires a new “meta-economic” framework in which short-term portfolio-investment flows are treated as the dominant phenomenon they have become. Organized by global finance, these layered bi-directional flows between center and periphery manage a tension between financial concentration and monetary fragmentation. The resulting imbalances express the asymmetries built into that tension and render the exchange rate a more strategic policy variable than ever.

JEL Classification: F32; F33; F44.


Keywords: global finance monetary fragmentation hot-money flows meta-economic framework exchange rates