Financialisation and Development: how can emerging economies catch up?

Danielle Guizzo, Eduardo Strachman, Fabiano Dalto and Carmem Feijo

MPRA Paper from University Library of Munich, Germany

Abstract: The influences of financialisation over emerging economies have drawn significant attention on whether these nations are able or not to overcome its constraints and promote satisfactory development levels. The possibilities for overcoming financial dominance, however, deserve further attention on what concerns its structural causes and policy alternatives. This article has two objectives. First, it formalises three key characteristics behind the financialisation of developing economies, focusing on some key elements that differentiate financialisation in developed versus emerging economies: interest rate behaviour; exchange rate volatility and balance of payments dominance. Secondly, it discusses some strategies for developing countries to overcome the effects of financialisation based on the hypothesis of increasing policy space, which allows these economies to retain autonomy on their macroeconomic policies and to conduct domestic policies in an integrated scenario

Keywords: Financialisation, Developing Countries; Interest Rate; Exchange Rate; Policy Space (search for similar items in EconPapers)
JEL-codes: E42 E44 E61 (search for similar items in EconPapers)
Date: 2018-05-29
New Economics Papers: this item is included in nep-mac
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