Financialisation and development: How can emerging economies catch up?

Guizzo, Danielle; Strachman, Eduardo; Dalto, Fabiano; Feijo, Carmem

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.

Citation

Guizzo, D., Strachman, E., Dalto, F., & Feijo, C. (2018). Financialisation and development: How can emerging economies catch up?

• Report Type: Discussion Paper
• Publication Date: May 30, 2018
• Publicly Available Date: Jun 7, 2019
• Peer Reviewed: Peer Reviewed
• Keywords: financialisation, developing countries, interest rate, exchange rate, policy space
• Public URL: https://uwe-repository.worktribe.com/output/867571
• Publisher URL: http://www.ie.ufrj.br/images/grupo_cede/publica%C3%A7%C3%B5es/discuss%C3%A3o/2018/139_9abec.pdf
• Additional Information: Corporate Creators : CEDE - Centro de Estudos sobre Desigualdade e Desenvolvimento (Federal University of Rio de Janeiro), Brazil