Currency Hierarchy and Financial Globalisation: Implications for Peripheral Economies

This insightful book investigates how financial globalisation shapes the hierarchical order of currencies in the international monetary system, evaluating the implications for peripheral countries. Authors Luiz Fernando de Paula, Barbara Fritz and Daniela Magalhães Prates explore currency hierarchy through a new Keynesian-Structuralist perspective, highlighting how peripheral economies are subject to greater macroeconomic and financial volatility. They outline how the current hierarchy fosters global and national inequalities, limiting peripheral countries’ capacity to implement social and redistributive policies, and preventing them from achieving income parity. The book traces the historical evolution of the global monetary order, examines a new channel of external vulnerability, and illustrates the asymmetries between the two groups of peripheral countries, namely emerging market economies and frontier market economies. Adopting a forward-thinking approach, this book assesses potential policy shifts and their effectiveness in fostering growth, sustainability and equity. Currency Hierarchy and Financial Globalisation is a valuable resource for scholars and students in the fields of financial and international economics. The financial analysis and empirical research presented in this book will also be of great benefit to policy makers and practitioners.

About the Author :
Luiz Fernando de Paula, Professor of Economics, Institute of Economics, Federal University of Rio de Janeiro, Brazil, Barbara Fritz, Professor of Economics, School of Business & Economics and the Institute for Latin American Studies at the Freie Universität Berlin, Germany and Daniela Magalhães Prates, Senior Economist working at an International Organisation and former Associate Professor of Economics, University of Campinas (UNICAMP), Brazil

Review :
‘This is a hugely important book that draws together decades of research on the nature of the international monetary and financial system, exploring the position of developing countries therein. It convincingly shows how the subordination of developing country currencies is a fundamental constraint to (macroeconomic) policy making and thus to development and structural change. It is a must read for anybody trying to understand persistent global inequalities.’ ‘This fascinating book goes beyond the economics of ‘original sin’ to advance the concept of international financial subordination. The authors not only characterize the present by drawing on empirical work and historical analysis, they also chart a way forward for the future. This is a must read for economists, policy-makers, and students of development, international finance, and beyond.’