Repensando las Finanzas para el Crecimiento Estable de los Paìses en Desarrollo

The volume describes the restrictions that the international financial system imposes to the stability and growth of emergent economies and the strategy followed by different countries to overtake them. It argues that the financial liberalisation imposed after the 1970s has raised the instability felt by these countires and has negatively affected their ability to grow. Morevoer, it has made the international financial system confronting the emergent countries bigger, more complex and more powerful. The paper points out that financial liberalisation has forced emergent countries to increase their official reserves, thus using part of their national porduct to fund the richest countries. To do that, emergent countries have also been bound to raise the policy rate of interest, affecting negatively their investment decisions, and to apply a "spurious" form of inflation targeting in their monetary policy. They have been bound to pay considerable attention to the nominal exchange rate, trying to stabilise it in order to avoid abrupted changes in their level. The stabilisation of the nominal exchange rate has however induced an overvaluation of the real one, which has weakened the ability of these countires to compete in the international markets.