From Financieristic to Real Macroeconomics : Seeking Development Convergence in Emerging Economies
Macroeconomic "fundamentals" are a most relevant variable for economic development. However, there is wide misunderstanding about which are the "sound macroeconomic fundamentals," contributing to sustained economic growth. The a...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/642921468348846547/From-financieristic-to-real-macroeconomics-seeking-development-convergence-in-emerging-economies http://hdl.handle.net/10986/28018 |
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okr-10986-28018 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
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English en_US |
| topic |
ABSORPTIVE CAPACITY ADVANCED ECONOMIES AGGREGATE DEMAND AGGREGATE SUPPLY ANNUAL GROWTH APPETITE FOR RISK AVERAGE PRODUCTIVITY BONDS BUDGET DEFICITS BUSINESS CYCLE BUSINESS CYCLES CAPITAL ACCOUNTS CAPITAL FLIGHT CAPITAL FLIGHTS CAPITAL FLOWS CAPITAL FORMATION CAPITAL GAINS CAPITAL INFLOWS CAPITAL MARKETS CAPITAL OUTFLOWS CAPITAL STOCK CENTRAL BANK COMPARATIVE ADVANTAGES COMPETITIVENESS CONSUMERS CREDIBILITY CREDIT BOOM CURRENCY CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS DEBT DEBT CRISIS DEPRECIATION DEVALUATION DEVELOPMENT STRATEGIES DISEQUILIBRIUM DOMESTIC CURRENCIES DOMESTIC CURRENCY DOMESTIC DEMAND DOMESTIC GOODS DOMESTIC INTEREST RATES DOMESTIC MACROECONOMIC POLICIES DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DOMESTIC SAVINGS DOWNWARD PRESSURES DURABLE GOODS DUTCH DISEASE ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC FLUCTUATIONS ECONOMIC GROWTH ECONOMIC RENTS ECONOMIC SITUATION ECONOMIC STRUCTURES EQUILIBRIA EXCHANGE RATE ANCHOR EXCHANGE RATE APPRECIATION EXCHANGE RATE POLICIES EXCHANGE RATE SYSTEMS EXCHANGE RATES EXPLANATORY VARIABLE EXPORT MARKETS EXPORTS EXPOSURE EXTERNAL DEFICIT EXTERNAL DEFICITS EXTERNAL FINANCING EXTERNAL SHOCKS EXTERNALITIES FACTOR MARKETS FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL INSTABILITY FINANCIAL INTERMEDIATION FINANCIAL LIBERALIZATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REFORMS FINANCIAL SECTOR FINANCIAL TRANSACTION FISCAL BALANCE FISCAL BALANCES FISCAL DEFICITS FISCAL DISCIPLINE FISCAL POLICIES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE REGIMES FOREIGN CURRENCY FOREIGN CURRENCY MARKET FOREIGN EXCHANGE GDP GLOBALIZATION GROWTH RATE GROWTH RATES HUMAN CAPITAL IMBALANCES IMPORTS INCOME INCOMPLETE MARKETS INDEBTEDNESS INFLATION INFLATION RATE INFLATION TARGET INFLATION TARGETING INFLATION TAX INFLATIONARY PRESSURES INFLATIONARY PROCESSES INTEREST RATE INTEREST RATES INTERMEDIATE EXCHANGE RATE INTERNATIONAL CAPITAL MARKETS INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL FINANCIAL SYSTEM INTERNATIONAL INTEREST INTERNATIONAL INTEREST RATES INTERNATIONAL MARKET INTERNATIONAL MARKETS INTERNATIONAL TRADE INVENTORY INVESTMENT OPPORTUNITIES INVESTMENT RATIO INVESTMENT RATIOS LABOR FORCE LDCS LEVEL OF INVESTMENT LIQUID MARKETS LIQUIDITY LIQUIDITY CONSTRAINTS LOCAL CURRENCY MACROECONOMIC ADJUSTMENT MACROECONOMIC ADJUSTMENTS MACROECONOMIC CONDITIONS MACROECONOMIC INSTABILITY MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC VARIABLES MACROECONOMICS MARKET ECONOMY MARKET TRANSACTIONS MONETARY POLICIES MONETARY POLICY MONETARY POLICY REGIME MONEY SUPPLY NATIONAL INCOME NATURAL RESOURCES NEGATIVE EXTERNALITIES NEWLY INDUSTRIALIZED COUNTRIES NOMINAL ANCHOR OIL PRICE OPEN CAPITAL ACCOUNT OPEN ECONOMIES OUTPUT GAP OUTPUT GAPS PERMANENT INCOME POTENTIAL OUTPUT POVERTY REDUCTION PRICE FLUCTUATIONS PRICE INDEX PRICE STABILITY PRIVATE CAPITAL PRODUCTION FUNCTION PRODUCTIVE ASSETS PRODUCTIVE SYSTEMS PRODUCTIVITY PUBLIC DEFICITS PUBLIC EXPENDITURE PUBLIC INVESTMENT PURCHASING POWER RAPID GROWTH RATE OF INFLATION REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST RATES RECESSION RECESSIONS RELATIVE PRICES RELATIVE WEIGHT RESTRICTIVE MONETARY POLICIES REVALUATIONS RISK MANAGEMENT SAVINGS SLOW GROWTH STOCK MARKET STOCK PRICES SUPPLY SIDE SURPLUSES TAX INCREASES TEQUILA CRISIS TOTAL FACTOR PRODUCTIVITY TRADE LIBERALIZATION TRADE POLICIES TRADE REFORMS TRADE SHOCKS UNCERTAINTY UNEMPLOYMENT VALUE ADDED VOLATILITY OF CAPITAL WAGES WEALTH WORLD ECONOMY WORLD INTEREST RATES WORLD MARKETS |
| spellingShingle |
ABSORPTIVE CAPACITY ADVANCED ECONOMIES AGGREGATE DEMAND AGGREGATE SUPPLY ANNUAL GROWTH APPETITE FOR RISK AVERAGE PRODUCTIVITY BONDS BUDGET DEFICITS BUSINESS CYCLE BUSINESS CYCLES CAPITAL ACCOUNTS CAPITAL FLIGHT CAPITAL FLIGHTS CAPITAL FLOWS CAPITAL FORMATION CAPITAL GAINS CAPITAL INFLOWS CAPITAL MARKETS CAPITAL OUTFLOWS CAPITAL STOCK CENTRAL BANK COMPARATIVE ADVANTAGES COMPETITIVENESS CONSUMERS CREDIBILITY CREDIT BOOM CURRENCY CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS DEBT DEBT CRISIS DEPRECIATION DEVALUATION DEVELOPMENT STRATEGIES DISEQUILIBRIUM DOMESTIC CURRENCIES DOMESTIC CURRENCY DOMESTIC DEMAND DOMESTIC GOODS DOMESTIC INTEREST RATES DOMESTIC MACROECONOMIC POLICIES DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DOMESTIC SAVINGS DOWNWARD PRESSURES DURABLE GOODS DUTCH DISEASE ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC FLUCTUATIONS ECONOMIC GROWTH ECONOMIC RENTS ECONOMIC SITUATION ECONOMIC STRUCTURES EQUILIBRIA EXCHANGE RATE ANCHOR EXCHANGE RATE APPRECIATION EXCHANGE RATE POLICIES EXCHANGE RATE SYSTEMS EXCHANGE RATES EXPLANATORY VARIABLE EXPORT MARKETS EXPORTS EXPOSURE EXTERNAL DEFICIT EXTERNAL DEFICITS EXTERNAL FINANCING EXTERNAL SHOCKS EXTERNALITIES FACTOR MARKETS FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL INSTABILITY FINANCIAL INTERMEDIATION FINANCIAL LIBERALIZATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REFORMS FINANCIAL SECTOR FINANCIAL TRANSACTION FISCAL BALANCE FISCAL BALANCES FISCAL DEFICITS FISCAL DISCIPLINE FISCAL POLICIES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE REGIMES FOREIGN CURRENCY FOREIGN CURRENCY MARKET FOREIGN EXCHANGE GDP GLOBALIZATION GROWTH RATE GROWTH RATES HUMAN CAPITAL IMBALANCES IMPORTS INCOME INCOMPLETE MARKETS INDEBTEDNESS INFLATION INFLATION RATE INFLATION TARGET INFLATION TARGETING INFLATION TAX INFLATIONARY PRESSURES INFLATIONARY PROCESSES INTEREST RATE INTEREST RATES INTERMEDIATE EXCHANGE RATE INTERNATIONAL CAPITAL MARKETS INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL FINANCIAL SYSTEM INTERNATIONAL INTEREST INTERNATIONAL INTEREST RATES INTERNATIONAL MARKET INTERNATIONAL MARKETS INTERNATIONAL TRADE INVENTORY INVESTMENT OPPORTUNITIES INVESTMENT RATIO INVESTMENT RATIOS LABOR FORCE LDCS LEVEL OF INVESTMENT LIQUID MARKETS LIQUIDITY LIQUIDITY CONSTRAINTS LOCAL CURRENCY MACROECONOMIC ADJUSTMENT MACROECONOMIC ADJUSTMENTS MACROECONOMIC CONDITIONS MACROECONOMIC INSTABILITY MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC VARIABLES MACROECONOMICS MARKET ECONOMY MARKET TRANSACTIONS MONETARY POLICIES MONETARY POLICY MONETARY POLICY REGIME MONEY SUPPLY NATIONAL INCOME NATURAL RESOURCES NEGATIVE EXTERNALITIES NEWLY INDUSTRIALIZED COUNTRIES NOMINAL ANCHOR OIL PRICE OPEN CAPITAL ACCOUNT OPEN ECONOMIES OUTPUT GAP OUTPUT GAPS PERMANENT INCOME POTENTIAL OUTPUT POVERTY REDUCTION PRICE FLUCTUATIONS PRICE INDEX PRICE STABILITY PRIVATE CAPITAL PRODUCTION FUNCTION PRODUCTIVE ASSETS PRODUCTIVE SYSTEMS PRODUCTIVITY PUBLIC DEFICITS PUBLIC EXPENDITURE PUBLIC INVESTMENT PURCHASING POWER RAPID GROWTH RATE OF INFLATION REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST RATES RECESSION RECESSIONS RELATIVE PRICES RELATIVE WEIGHT RESTRICTIVE MONETARY POLICIES REVALUATIONS RISK MANAGEMENT SAVINGS SLOW GROWTH STOCK MARKET STOCK PRICES SUPPLY SIDE SURPLUSES TAX INCREASES TEQUILA CRISIS TOTAL FACTOR PRODUCTIVITY TRADE LIBERALIZATION TRADE POLICIES TRADE REFORMS TRADE SHOCKS UNCERTAINTY UNEMPLOYMENT VALUE ADDED VOLATILITY OF CAPITAL WAGES WEALTH WORLD ECONOMY WORLD INTEREST RATES WORLD MARKETS Ffrench-Davis, Ricardo From Financieristic to Real Macroeconomics : Seeking Development Convergence in Emerging Economies |
| relation |
Commission on Growth and Development Working Paper;No. 44 |
| description |
Macroeconomic "fundamentals"
are a most relevant variable for economic development.
However, there is wide misunderstanding about which are the
"sound macroeconomic fundamentals," contributing
to sustained economic growth. The approach in fashion in the
mainstream world and international finance institutions
(IFIs) emphasizes macroeconomic balances of two pillars: low
inflation and fiscal balances. The author calls it
financieristic macroeconomic balances. Additionally, a
frequent assertion in the conventional literature is that an
open capital account contributes to impose macroeconomic
discipline in emerging economies (EEs). There is strong
evidence that financieristic balances have not provided a
macroeconomic environment contributing to sustained growth.
A third pillar must be added, linked to the productive side
of the economy. The behavior of aggregate demand, at levels
consistent with potential gross domestic product (GDP), is a
crucial part of a third pillar for real macroeconomic
balances, which has frequently failed in neoliberal
experiences. Similarly crucial parts are well-aligned
macro-prices, like interest and exchange rates. Frequently,
these prices and aggregate demand have behaved as outliers,
as reflected in economies working either well below
potential GDP (the most frequent result), or overheated,
with a booming aggregate demand and a large external
deficit. This paper analyses alternative macroeconomic
environments faced by firms and workers in the productive
side of the economy (the producers of GDP), and the
interrelationship between financial and real variables. The
author analyzes alternative structural countercyclical
fiscal policies, intermediate exchange rate policies, and
capital account approaches. |
| format |
Working Paper |
| author |
Ffrench-Davis, Ricardo |
| author_facet |
Ffrench-Davis, Ricardo |
| author_sort |
Ffrench-Davis, Ricardo |
| title |
From Financieristic to Real Macroeconomics : Seeking Development Convergence in Emerging Economies |
| title_short |
From Financieristic to Real Macroeconomics : Seeking Development Convergence in Emerging Economies |
| title_full |
From Financieristic to Real Macroeconomics : Seeking Development Convergence in Emerging Economies |
| title_fullStr |
From Financieristic to Real Macroeconomics : Seeking Development Convergence in Emerging Economies |
| title_full_unstemmed |
From Financieristic to Real Macroeconomics : Seeking Development Convergence in Emerging Economies |
| title_sort |
from financieristic to real macroeconomics : seeking development convergence in emerging economies |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/642921468348846547/From-financieristic-to-real-macroeconomics-seeking-development-convergence-in-emerging-economies http://hdl.handle.net/10986/28018 |
| _version_ |
1764465978970734592 |
| spelling |
okr-10986-280182021-04-23T14:04:46Z From Financieristic to Real Macroeconomics : Seeking Development Convergence in Emerging Economies Ffrench-Davis, Ricardo ABSORPTIVE CAPACITY ADVANCED ECONOMIES AGGREGATE DEMAND AGGREGATE SUPPLY ANNUAL GROWTH APPETITE FOR RISK AVERAGE PRODUCTIVITY BONDS BUDGET DEFICITS BUSINESS CYCLE BUSINESS CYCLES CAPITAL ACCOUNTS CAPITAL FLIGHT CAPITAL FLIGHTS CAPITAL FLOWS CAPITAL FORMATION CAPITAL GAINS CAPITAL INFLOWS CAPITAL MARKETS CAPITAL OUTFLOWS CAPITAL STOCK CENTRAL BANK COMPARATIVE ADVANTAGES COMPETITIVENESS CONSUMERS CREDIBILITY CREDIT BOOM CURRENCY CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS DEBT DEBT CRISIS DEPRECIATION DEVALUATION DEVELOPMENT STRATEGIES DISEQUILIBRIUM DOMESTIC CURRENCIES DOMESTIC CURRENCY DOMESTIC DEMAND DOMESTIC GOODS DOMESTIC INTEREST RATES DOMESTIC MACROECONOMIC POLICIES DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DOMESTIC SAVINGS DOWNWARD PRESSURES DURABLE GOODS DUTCH DISEASE ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC FLUCTUATIONS ECONOMIC GROWTH ECONOMIC RENTS ECONOMIC SITUATION ECONOMIC STRUCTURES EQUILIBRIA EXCHANGE RATE ANCHOR EXCHANGE RATE APPRECIATION EXCHANGE RATE POLICIES EXCHANGE RATE SYSTEMS EXCHANGE RATES EXPLANATORY VARIABLE EXPORT MARKETS EXPORTS EXPOSURE EXTERNAL DEFICIT EXTERNAL DEFICITS EXTERNAL FINANCING EXTERNAL SHOCKS EXTERNALITIES FACTOR MARKETS FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL INSTABILITY FINANCIAL INTERMEDIATION FINANCIAL LIBERALIZATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REFORMS FINANCIAL SECTOR FINANCIAL TRANSACTION FISCAL BALANCE FISCAL BALANCES FISCAL DEFICITS FISCAL DISCIPLINE FISCAL POLICIES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE REGIMES FOREIGN CURRENCY FOREIGN CURRENCY MARKET FOREIGN EXCHANGE GDP GLOBALIZATION GROWTH RATE GROWTH RATES HUMAN CAPITAL IMBALANCES IMPORTS INCOME INCOMPLETE MARKETS INDEBTEDNESS INFLATION INFLATION RATE INFLATION TARGET INFLATION TARGETING INFLATION TAX INFLATIONARY PRESSURES INFLATIONARY PROCESSES INTEREST RATE INTEREST RATES INTERMEDIATE EXCHANGE RATE INTERNATIONAL CAPITAL MARKETS INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL FINANCIAL SYSTEM INTERNATIONAL INTEREST INTERNATIONAL INTEREST RATES INTERNATIONAL MARKET INTERNATIONAL MARKETS INTERNATIONAL TRADE INVENTORY INVESTMENT OPPORTUNITIES INVESTMENT RATIO INVESTMENT RATIOS LABOR FORCE LDCS LEVEL OF INVESTMENT LIQUID MARKETS LIQUIDITY LIQUIDITY CONSTRAINTS LOCAL CURRENCY MACROECONOMIC ADJUSTMENT MACROECONOMIC ADJUSTMENTS MACROECONOMIC CONDITIONS MACROECONOMIC INSTABILITY MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC VARIABLES MACROECONOMICS MARKET ECONOMY MARKET TRANSACTIONS MONETARY POLICIES MONETARY POLICY MONETARY POLICY REGIME MONEY SUPPLY NATIONAL INCOME NATURAL RESOURCES NEGATIVE EXTERNALITIES NEWLY INDUSTRIALIZED COUNTRIES NOMINAL ANCHOR OIL PRICE OPEN CAPITAL ACCOUNT OPEN ECONOMIES OUTPUT GAP OUTPUT GAPS PERMANENT INCOME POTENTIAL OUTPUT POVERTY REDUCTION PRICE FLUCTUATIONS PRICE INDEX PRICE STABILITY PRIVATE CAPITAL PRODUCTION FUNCTION PRODUCTIVE ASSETS PRODUCTIVE SYSTEMS PRODUCTIVITY PUBLIC DEFICITS PUBLIC EXPENDITURE PUBLIC INVESTMENT PURCHASING POWER RAPID GROWTH RATE OF INFLATION REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST RATES RECESSION RECESSIONS RELATIVE PRICES RELATIVE WEIGHT RESTRICTIVE MONETARY POLICIES REVALUATIONS RISK MANAGEMENT SAVINGS SLOW GROWTH STOCK MARKET STOCK PRICES SUPPLY SIDE SURPLUSES TAX INCREASES TEQUILA CRISIS TOTAL FACTOR PRODUCTIVITY TRADE LIBERALIZATION TRADE POLICIES TRADE REFORMS TRADE SHOCKS UNCERTAINTY UNEMPLOYMENT VALUE ADDED VOLATILITY OF CAPITAL WAGES WEALTH WORLD ECONOMY WORLD INTEREST RATES WORLD MARKETS Macroeconomic "fundamentals" are a most relevant variable for economic development. However, there is wide misunderstanding about which are the "sound macroeconomic fundamentals," contributing to sustained economic growth. The approach in fashion in the mainstream world and international finance institutions (IFIs) emphasizes macroeconomic balances of two pillars: low inflation and fiscal balances. The author calls it financieristic macroeconomic balances. Additionally, a frequent assertion in the conventional literature is that an open capital account contributes to impose macroeconomic discipline in emerging economies (EEs). There is strong evidence that financieristic balances have not provided a macroeconomic environment contributing to sustained growth. A third pillar must be added, linked to the productive side of the economy. The behavior of aggregate demand, at levels consistent with potential gross domestic product (GDP), is a crucial part of a third pillar for real macroeconomic balances, which has frequently failed in neoliberal experiences. Similarly crucial parts are well-aligned macro-prices, like interest and exchange rates. Frequently, these prices and aggregate demand have behaved as outliers, as reflected in economies working either well below potential GDP (the most frequent result), or overheated, with a booming aggregate demand and a large external deficit. This paper analyses alternative macroeconomic environments faced by firms and workers in the productive side of the economy (the producers of GDP), and the interrelationship between financial and real variables. The author analyzes alternative structural countercyclical fiscal policies, intermediate exchange rate policies, and capital account approaches. 2017-08-28T17:13:46Z 2017-08-28T17:13:46Z 2008 Working Paper http://documents.worldbank.org/curated/en/642921468348846547/From-financieristic-to-real-macroeconomics-seeking-development-convergence-in-emerging-economies http://hdl.handle.net/10986/28018 English en_US Commission on Growth and Development Working Paper;No. 44 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: Working Paper Publications & Research |