A Minskyan account of emerging currencies dynamics

Ramos, Raquel Almeida

doi:10.1080/01603477.2019.1640066

Cited by 10 publications

(4 citation statements)

References 36 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…EEs, including Latin American countries, have become over time more open to international financial flows from international portfolio investors. This growing financial integration however takes a subordinate form: based on Keynes' theory of liquidity preference, these authors argue that EEs currencies' are less able to perform the functions of money in international markets, and thus occupy a lower rank in a global currency hierarchy (Kaltenbrunner, 2015;Andrade and Prates, 2013;Ramos, 2019). As a consequence, EEs are forced to remain attractive to foreign capital to maintain sufficient demand for their currency in an attempt to stabilise the exchange rate and financial flows, whose volatility depends on forces largely beyond their control (Bortz and Kaltenbrunner, 2018;Kaltenbrunner and Painceira, 2018;Levy-Orlik and Ortiz, 2016;Alami, 2018).…”

Section: Pension Funds and Variegated Financialisation In Latin Americamentioning

confidence: 99%

Variegated financialization and pension fund asset demand: the case of Colombia and Perú

Bonizzi

Churchill

Guevara

2020

Socio-Economic Review

View full text Add to dashboard Cite

This article seeks to explain concretely how one ‘variegation’ of financialization in the emerging economy setting is being shaped by the growth of domestic pension funds. Taking Colombia and Perú as case studies, we explore the evolution of pension fund demand subsequent to substantial pension policy reforms in the 1990s. Drawing on comparative political economy and the recent literature on subordinate financialization in emerging economies, we present a three-tiered conjecture regarding what is shaping pension fund demand: (a) the particular institutional context of ‘hierarchical market economies’ and neoliberal market reforms, (b) the ‘extraverted’ growth regime and (c) subordinate financial integration. The resulting demand calls forth financial innovation and movement towards market-based financial mechanisms as seen with financialization elsewhere, yet in this instance occurring largely outside of domestic capital markets.

show abstract

Section: Pension Funds and Variegated Financialisation In Latin Americamentioning

confidence: 99%

Variegated financialization and pension fund asset demand: the case of Colombia and Perú

Bonizzi

Churchill

Guevara

2020

Socio-Economic Review

View full text Add to dashboard Cite

show abstract

“…Second, the currencies of the big EMEs, such as the Brazilian Real, the South African ZAR and the Mexican peso, experienced a slight increase, from 0 to 1-2 per cent in the same period. However, in the latter cases, even this small increase is somehow misleading since it does not stem from an increased liquidity premium, but instead reflects the demand for them as speculative assets associated with the greater liquidity and deepness of their foreign exchange derivative markets (Orsi 2019;Ramos 2019).…”

Section: The Concepts Of Currency and Financial Hierarchiesmentioning

confidence: 99%

Frontier-market economies as a new group of the financial periphery: patterns and transmission channels of global shocks

Prates,

Fritz,

Paula

2023

European Journal of Economics and Economic Policies Intervention

View full text Add to dashboard Cite

This paper seeks to fill a gap in the literature on frontier market economies (FMEs) with the following two research questions: (i) Which are the drivers of FMEs’ integration into financial globalisation? (ii) What explains the greater vulnerability of FMEs compared to emerging market economies (EMEs) to global financial shocks? We argue that the emergence of FMEs as a new group of the financial periphery fills a vacuum left for global investors by the major EMEs, whose spreads declined in the past decade due to high foreign currency reserve accumulation and other EME-related factors. To answer the second question, we introduce the concept of financial hierarchy as a second layer of the currency hierarchy: while the currency hierarchy is organized by the different degrees of liquidity premia currencies offer, in the financial hierarchy, not currencies, but financial assets are placed according to the nominal yield. While FMEs’ currencies have a lower liquidity premium than those of EMEs, the difference between them is not vast – as both are not accepted at the international level – and are insufficient to explain FMEs’ greater vulnerability to external financial shocks. We argue in the paper that this vulnerability stems mainly from the position of FMEs’ at the bottom of the financial hierarchy, which results in a different pattern of international financial integration.

show abstract

“…12. For a formalization of the relationship between liquidity preference and liquidity premium, see Ramos (2019). 13.…”

Section: Currency Hierarchy and New Forms Of Financial Integration Of...mentioning

confidence: 99%

“…Over the boom phase, the continuity of investors' low liquidity preference leads to a sustained and gradual increase in the demand for EMEs' assets and hence a gradual currency appreciation path. Conversely, over the bust phases, by virtue of changes in the monetary policy in the AEs and/or an increase in the international liquidity preference, sudden capital outflows trigger deflation of EMEs' financial assets and an abrupt depreciation of EMEs' currencies, which are the main victims of global investors' flight to quality (Ramos 2019; see also Paula et al 2017;Kaltenbrunner 2015).…”

Section: Currency Hierarchy and New Forms Of Financial Integration Of...mentioning

confidence: 99%

Currency hierarchy and financial globalization in emerging economies: how far does Riese’s critique of growth by external debt still hold?

2022

EJEEP

View full text Add to dashboard Cite

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use:Documents in EconStor may be saved and copied for your personal and scholarly purposes.You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an OpenContent Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.

show abstract

A Minskyan account of emerging currencies dynamics

Cited by 10 publications

References 36 publications

Variegated financialization and pension fund asset demand: the case of Colombia and Perú

Variegated financialization and pension fund asset demand: the case of Colombia and Perú

Frontier-market economies as a new group of the financial periphery: patterns and transmission channels of global shocks

Currency hierarchy and financial globalization in emerging economies: how far does Riese’s critique of growth by external debt still hold?

Contact Info

Product

Resources

About