1st Edition

Global Imbalances and Financial Capitalism Stock-Flow-Consistent Modelling

By Jacques Mazier Copyright 2020
    318 Pages 58 B/W Illustrations
    by Routledge

    318 Pages 58 B/W Illustrations
    by Routledge

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    The past few decades have witnessed the emergence of economic imbalances at the world level and within the euro zone. The failure of mainstream economics to accurately predict financial crises, or model the effects of finance-led growth, highlights the need for alternative frameworks.

    A key text, Global Imbalances and Financial Capitalism: Stock-Flow-Consistent Modelling demonstrates that Stock-Flow-Consistent models are well adapted to study this growth regime due to their ability to analyse the real and financial sides of the economy in an integrated way. This approach is combined with an analysis of exchange rate misalignments using the Fundamental Equilibrium Exchange Rate (FEER) methodology, which serves to give a synthetic view of international imbalances. Together, these models describe how global and regional imbalances are created, as well as suggest appropriate tools through which they may be reduced. The book also considers alternative economic policies in the euro zone (international risk sharing, fiscal federalism, eurobonds, European investments, a multispeed euro zone) alongside alternative monetary policies. In particular, it examines the possibilities of using SDR (Special Drawing Rights) as a reserve asset to be issued to fight a global recession, to support the development of low-income countries, or as an anchor to improve global monetary stability.

    This text will be of interest to students, scholars, and researchers of economic theory and international monetary economics. It will also appeal to professional organisations who supervise international relations.

      Part 1 - Finance-led regime and global imbalances: a first glance
    Chapter 1 A simple finance-led SFC model
    Chapter 2 Exchange rate misalignments and global imbalances
    Chapter 3 Global imbalances and macroeconomic adjustments: a three-country SFC model
      Part 2 - European challenges
    Chapter 4 From the European Monetary System to the single currency trap
    Chapter 5 Alternative economic policies in the euro zone
    Chapter 6 Alternative exchange rate regimes for the euro zone
      Part 3 - Enhancing regional and international monetary stability
    Chapter 7 Exploring monetary cooperation in East Asia
    Chapter 8 Enhancing the role of the SDR


    Jacques Mazier is Professor Emeritus at the University Sorbonne Paris Nord, CEPN-CNRS, France.

    "This is the first book that combines in a systematic way two essential macroeconomic approaches that are essential to our understanding of international macroeconomic imbalances: the well-known Fundamental Equilibrium Exchange Rate (FEER) and the ever-more popular post-Keynesian stock-flow consistent (SFC) approach." - Marc Lavoie, Senior Research Chair, University of Sorbonne Paris Cité, France