Chronic macro-economic and financial imbalances in the world economy: a meta-economic view

• Main Author: ROBERT GUTTMANN
• Format: Article
• Language: English
• Published: Editora 34 2015-06-01
• Series: Brazilian Journal of Political Economy
• Subjects: finanças globais; fragmentação monetária; fluxos de dinheiro; estrutura meta-econômica; taxas de câmbio
• Online Access: http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572015000200203&lng=en&tlng=en

Global finance, combining offshore banking and universal banks to drive a broader globalization process, has transformed the modus operandi of the world economy. This requires a new "meta-economic" framework in which short-term portfolio-investment flows are treated as the dominant phenomenon they have become. Organized by global finance, these layered bi-directional flows between center and periphery manage a tension between financial concentration and monetary fragmentation. The resulting imbalances express the asymmetries built into that tension and render the exchange rate a more strategic policy variable than ever.