Financing for development and the post Keynesian case for a new global reserve currency

David Hudson
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David Hudson: Department of Political Science, School of Public Policy, University College London, London, UK, Postal: Department of Political Science, School of Public Policy, University College London, London, UK

Journal of International Development, 2010, vol. 22, issue 6, 772-787

Abstract: In the context of the current financial crisis the article returns to the Keynes's plan for an international clearing house. In exploring the intellectual basis for Keynes's economics-namely uncertainty and liquidity preference-the article identifies the anti-developmental characteristics of US dollar-based international monetary system: (1) financial volatility and recurrent crises, (2) costly excessive international reserves, (3) the fundamental asymmetry of a system in which developing countries finance the US. Collectively these result in global deflationary tendencies which are caused less by a lack of liquidity than systemic inefficiencies. Keynes's plan for international monetary reform offers a solution to all of these problems. Copyright © 2010 John Wiley & Sons, Ltd.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jintdv:v:22:y:2010:i:6:p:772-787

DOI: 10.1002/jid.1724

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