Crises in Emerging Economies and the Tight Grip of the Dollar on the Global Economy

Annina Kaltenbrunner is Lecturer in the Economics of Globalisation and the International Economy at Leeds University Business School. Her areas of research are development economics, international finance, monetary economics, international political economy, heterodox economics and methodology. She has published on exchange rate theory, emerging market currency internationalisation, financial integration and financialisation, external vulnerability, and the Eurozone Crisis. She is currently working on financialisation, financial integration and cross-border capital flows in emerging economies.

Annina has collaborated on work for the United Nations University (UNU), several European FP7 projects (AUGUR, FESSUD), a 2-year project on Finance and Inequality with the Foundation for European Progressive Studies (FEPS), the Austrian chamber of workers, and is currently working with the Brazilian Central Bank on the internationalisation of the Brazilian Real. She is an active member of several academic organisations, including the International Initiative for the Promotion of Political Economy (IIPPE), the Post Keynesian Study Group (PKSG) and the Reteaching Economics Network.

Crises in Emerging Economies and the tight grip of the Dollar on the Global Economy

Emerging Economies are in the news again. After several years of strong capital flows to these countries, recent months have seen a bout of renewed financial instability. Within more than a few days, the Turkish Lira lost more than half of its value. After extreme financial turmoil, the Argentinean government had to solicit help from the International Monetary Fund and accept its harsh policy conditions. At the same time, debt levels are soaring across the globe, among others in vulnerable African countries.

This talk discusses the developments which have led to these recent incidences of financial instability and shows how they reflect on the structure of the international monetary and financial system. It shows how these development are largely the result of policy changes in developed countries and are intimately related to the dominant position of the US and the US Dollar in the global economy. It concludes with some potential changes needed to make global financial markets work for the benefit of all countries and citizens.