 Institutions and Finance in Developing Countries: Challenges to OrthodoxyHoward Stein Chapter 20 in Macroeconomics, Finance and Money, 2010, pp 295-310 from Palgrave Macmillan Abstract: Abstract w about how financial systems best operate and in turn how they must be transformed to reach a hypothetical world arising from a false set of deductive principles. The result of these exercises has led to a series of unintended consequences including frequent and costly financial crises and disintermediation with a growing disconnect between the world of finance and more productive sectors of the economy. While neo-classical writers have often searched for extraneous explanations for these crises (not enough financial liberalization, wrong order of liberalization, political influence, etc.), post-Keynesian and institutional economists understand the problem as fundamentally theoretical and therefore entirely predictable. They have ventured forwarded an alternative body of theory and with it a different set of guiding principles to ensure the finance serves the rest of the economy rather than the perverse inversion we have witnessed with terrible consequences in recent years. Keywords: Interest Rate; Gross Domestic Product; Foreign Exchange; Commercial Bank; Banking Crisis (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-28558-3_20 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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