Neoliberalism and global capital mobility: A necessary reconsideration of textbook trade theory

Vol. 35 No. 2 (2015)

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

How to Cite

Raffer, Kunibert. 2015. “Neoliberalism and Global Capital Mobility: A Necessary Reconsideration of Textbook Trade Theory”. Brazilian Journal of Political Economy 35 (2):267-84. https://centrodeeconomiapolitica.org/repojs/index.php/journal/article/view/224.

Neoliberalism and global capital mobility: A necessary reconsideration of textbook trade theory

Kunibert Raffer
Department of Economics, Universität Wien.
Brazilian Journal of Political Economy, Vol. 35 No. 2 (2015), Apr-Jun / 2015, Pages 267-284

Abstract

Textbook theory ignores capital flows: trade determines exchange rates and specialisation. Approaches taking the effects of capital movements adequately into account are needed, and a new theory of economic policy including measures to protect the real economy from external volatility. Equilibrating textbook mechanisms cannot work unless trade-caused surpluses and deficits set exchange rates. To allow orthodox trade theory to work one must hinder capital flows from destroying its very basis, which the IMF and wrong regulatory decisions have done, penalising production and trade. A new, real economy based theory is proposed, a Neoclassical agenda of controlling capital flows and speculation.

JEL Classification: F11; F13; F32; F40; G15.


Keywords: trade theory specialisation capital movements neoliberalism speculation