Capital-account liberalization creates surplus-deficit imbalances and boom-bust cycles

Evidence

Internationally, these authors state, the liberalization of capital flows has created imbalances between statesthatmaintaincurrentaccountsurplusesandthosethatmaintaindeficits.Particularly in the developing economies, this has led to boom-bust cycles and exchange rate volatility (cf. the essays collected in Epstein, 2005b; Becker et al., 2010; Kaltenbrunner, 2010). Financialization has thus increased the vulnerability of economies worldwide. — Natascha van der Zwan, Making Sense of Financialization, 34

Categorization

• QUESTION: Worth chasing the Epstein 2005b collection citation for the specific developing-economy mechanisms behind the boom-bust claim.
• corroborated: 2 independent passages support this claim — Natascha van der Zwan, Making Sense of Financialization, 34
• XREF: connects to: Simultaneous deleveraging by all states makes export-led growth self-defeating — Mark Blyth, Austerity: The History of a Dangerous…, 48; Capital inflows had masked Portugal’s underlying demographic and growth deficits — Mark Blyth, Austerity: The History of a Dangerous…, 194; Euro-induced cheap credit caused periphery current account deficits and vulnerability — Mark Blyth, Austerity: The History of a Dangerous…, 221 (+10 more)

Related

• Financial fragility plus stagnant wages produce debt-driven growth regimes prone to crisis (similarity 0.79)

Broader Connections

• Capital accumulation inherently requires the subjugation of weaker economies #expands (0.78) — Clara E. Mattei, Escape from Capitalism, 337
• The CFA system’s credit repression causes savings scarcity, not the reverse #expands (0.75) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 140
• Financial crashes correct overextended finance relative to depressed industrial production #exemplifies (0.75) — Alex Callinicos, Against Postmodernism, 530
• Quantitative easing stabilized banks while inflating asset values for the affluent #qualifies (0.72) — Andrew deWaard, Derivative Media, 84