Exchange rate regime proposal for emerging countries: a Keynesian perspective

Fernando Ferrari-Filho and Luiz Fernando de Paula ()
Authors registered in the RePEc Author Service: Fernando Ferrari Filho ()

Journal of Post Keynesian Economics, 2008, vol. 31, issue 2, 227-248

Abstract: This paper presents, in light of Keynesian theory and taking into account the emerging economies' reality in today's global world, an exchange rate regime proposal for emerging countries with the capability to mitigate their external vulnerability and fragility and their dependence on foreign capital, thus making possible the implementation of domestic economic policies that would permit macroeconomic stabilizationâunderstood, following Keynes, as being the combination of price stability and full employment. For this purpose, the paper revisits Keynes's proposals with regard to both exchange rate policy and capital inflows, with a view to showing how they contribute to maintaining full employment, develops a Post Keynesian view on financial globalization and the behavior of exchange rate, and presents a strategy for an exchange rate regime with capital controls for emerging countries.

Keywords: capital controls; emerging countries; exchange rate regime proposal; Keynesian theory (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (6)

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