Currency hierarchy at the encounter of Keynesian, Latin American structuralist and inequality studies: an introduction

Luiz Fernando de Paula, Barbara Fritz and Daniela Magalhães Prates

A chapter in Currency Hierarchy and Financial Globalisation, 2026, pp 1-5 from Edward Elgar Publishing

Abstract: This book introduces the concept of currency hierarchy, challenging traditional views by building on a Keynesian and Latin American structuralist perspective. It focuses particularly on how currencies at the bottom of this hierarchy – those of peripheral countries – face unique constraints in macroeconomic policy autonomy, financial stability, and development policy. The authors define currency hierarchy as an arrangement structured by the liquidity premium, which is nurtured by the economic power of countries, the institutional features of financial markets, and also by political power (i.e. the influence on international institutions that shape the global monetary and financial order and the inertia of global currency dominance). Emphasising the role of monetary and financial asymmetries, this book advances the idea of international financial subordination and explores the limited policy space available to countries issuing non-dominant currencies. The book traces the historical evolution of the global monetary order, examines a new channel of external vulnerability, the so-called ‘original sin redux’, and investigates the asymmetries between the two groups of peripheral countries integrated into financial globalisation: emerging market economies and frontier market economies. Through this lens, it connects the currency hierarchy to broader developmentalist debates, offering an analytical framework and policy insights for navigating global financial inequalities.

Keywords: Currency hierarchy; Financial asymmetry; Emerging market economies; Peripheral currencies; Policy space (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035328826
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