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Growth of international finance and emerging economies: Elements for an alternative approach

Toporowski, Jan; Alves, Carolina

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Authors

Jan Toporowski

Carolina Alves



Abstract

This paper examines the increasing cross-border flows of capital involving developing and emerging economies in the past few decades. The discussion challenges the traditional economic theories based on net capital flows and deficits in current accounts to explain international borrowing by developing countries, and on the current account imbalances approach to explain financial crises. We argue that the increasing involvement of the private sector in developing countries’ external debt and the fact that the public sector, previously reliant almost entirely on official credit, has become able to access private debt markets, reflect the increasing integration of developing countries into the global financial system, and this process has particular features. A closer look at data on gross capital flows reveals that net capital flows neither explain nor capture this global financial integration.

Citation

Toporowski, J., & Alves, C. (2019). Growth of international finance and emerging economies: Elements for an alternative approach. PSL Quarterly Review, 72(288), 3-26. https://doi.org/10.13133/2037-3643_72.288_1

Journal Article Type Article
Acceptance Date Dec 15, 2018
Online Publication Date Mar 1, 2019
Publication Date Mar 1, 2019
Deposit Date Jul 24, 2019
Publicly Available Date Jul 24, 2019
Print ISSN 2037-3635
Electronic ISSN 2037-3643
Peer Reviewed Peer Reviewed
Volume 72
Issue 288
Pages 3-26
DOI https://doi.org/10.13133/2037-3643_72.288_1

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