Chronic macro-economic and financial imbalances in the world economy: a meta-economic view
Résumé
Global finance, combining offshore banking and universal banks to drive a broader globalization process, has transformed the modus operandi of the world economy. This requires a new “meta-economic” framework in which short-term portfolio-investment ows are treated as the dominant phenomenon they have be- come. Organized by global nance, these layered bi-directional ows between cen- ter and periphery manage a tension between nancial concentration and monetary fragmentation. The resulting imbalances express the asymmetries built into that ten- sion and render the exchange rate a more strategic policy variable than ever.