The real mechanisms of the global economy

Vol. 30 No. 4 (2010)

Oct-Dec / 2010
Published October 1, 2010

How to Cite

Asensio, Angel. 2010. “The Real Mechanisms of the Global Economy”. Brazilian Journal of Political Economy 30 (4):706-16.

The real mechanisms of the global economy

Angel Asensio
Professor of Economics at the Université Paris 13. Researcher at CEPN
Brazilian Journal of Political Economy, Vol. 30 No. 4 (2010), Oct-Dec / 2010, Pages 706-716


The paper presents the main arguments of Bresser Pereira's Globalization and Competition. Development strategies based on the 'conventional orthodoxy' are shown to carry serious drawbacks (“Dutch disease”, pernicious effects of external saving, currency overvaluation), while a 'new developmentalism' is promoted, in spite of the widespread belief that the nation-states have been dispossessed of their room for manoeuvre because of the globalization process. The “new developmentalism” is based on domestic finance, balanced public budgets, moderate interest rates and competitiveness policies aimed at neutralizing the tendency to exchange rate overappreciation. The paper also points out a few theoretical questions the book raises.

JEL Classification: F43; O11; O16; O19; O23; O24; O25.

Keywords: exchange rate currency overvaluation growth external saving new developmentalism