India’s External Sector C.P. Chandrasekhar and Jayati Ghosh

Even before global currents caused relatively rapid outflows of mobile finance capital from India, the Indian economy was vulnerable on the external front. The recent pattern of growth that has been reliant on capital inflows to generate domestic credit-driven bubbles, rather than trade surpluses is not sustainable and puts the economy at greater risk. External_Sector (Download the full text in PDF format) (This article was published in the Business Line on January 9, 2012)

Global Liquidity and Financial Flows to Developing Countries: New trends in emerging markets and their implications C.P. Chandrasekhar

This paper argues that supply-side factors rather than the financing requirements of developing countries, explain the recent revival and surge in capital flows into developing countries. Financial liberalization and the globalization of finance have also resulted in changes in the financial structure. This in turn has implications for the accumulation of risk in markets where agents tend to herd. Associated with this increasing risk are changes in the business practices and motivations of financial firms that reduce the role of finance in ensuring broad-based economic growth. global_liquidity (Download the full text in PDF format)

Global Liquidity and Financial Flows to Developing Countries: New trends in emerging markets and their implications C.P. Chandrasekhar

This paper attempts to examine the factors responsible for the recent revival and surge in capital flows into developing countries and the qualitative changes in financial integration that are accompanying this surge. The paper also looks at the impact that this surge is having on financial volatility and vulnerability, macroeconomic management and growth, in countries that have been “successful” in attracting such flows. It argues that post financial liberalisation, supply side factors have primarily caused the surge while the resultant changes in the financial structure has implications for the accumulation of risk and vulnerability to financial crisis in markets where…

Growth Patterns, Income Distribution and Poverty: Lessons from the Latin American Experience Carlos Aguiar de Medeiros

[Working Paper No. 02/2008] This paper explores some of the factors linking income growth, income distribution and poverty, historically observed in LACs, with particular reference to the recent experiences in Argentina, Brazil, Chile, Mexico and Venezuela. Given that the LACs have historically shown a high level of income concentration by all measures along with a high level of poverty which has invited a multitude of interpretations, this paper tries to analytically explore some myths on Latin American income distribution that are ingrained in the conventional literature. 02_2008 (Download the full text in PDF format)

The Growth cum Foreign Savings Strategy and the Brazilian Economy since the early 1990s Luiz Carlos Bresser-Pereira

Using the theory of the Second Washington Consensus, based on the opening of the financial accounts and the growth cum foreign savings strategy, this paper explains why even after the Real Plan of 1994, the Brazilian economy remained quasi-stagnant with soaring debts and two balance of payments crises. The paper discusses the conditions under which foreign savings are or are not favorable to growth, and argues that if a country is already indebted externally, and does not count with a cluster of profitable investment projects, capital inflows will just overvalue the exchange rate, increase artificially real wages, and cause increased…

How Did the West Get Rich? Alternative Stories and Alternative Lessons Luiz Carlos Bresser-Pereira

(Prepared as a bases for remarks delivered at the panel on "The New Development Economics: Critical Perspectives," at the Left Forum, New York, March 11, 2006.) The new development economics – and, more generally, the neo-liberal approach to economics – is based on certain ideas about markets and private property, in particular the idea that when property rights are secure and markets are allowed to function economic growth will be the salutary result. The condition that "markets are allowed to function" includes international markets, and an advocacy of free trade is certainly one of the hallmarks of the new development…

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