The Inexorable Evolution of Financialisation Financial Crises in Eme

Since the 2007 financial crisis, discussion on issues related to the size, spread and frequency of financial crises has captivated a wide variety of audiences. Why has the world economy experienced such a marked increase in financial transactions and priv

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The Inexorable Evolution of Financialisation Financial Crises in Emerging Markets Domna M. Michailidou Economic Consultant, Department of Country Studies, OECD, Paris, France and Research Fellow, Judge Business School, University of Cambridge, UK

© Domna M. Michailidou 2016 Foreword © G. C. Harcourt 2016 Softcover reprint of the hardcover 1st edition 2016 978-1-137-55363-8 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted her right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2016 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries.

ISBN 978-1-349-57594-7 ISBN 978-1-137-55364-5 (eBook) DOI 10.1007/978-1-137-55364-5 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Michailidou, Domna, 1987– The inexorable evolution of financialisation : financial crises in emerging markets / Domna Michailidou, Teaching Fellow,School of Public Policy, University College London, UK. pages cm 1. Developing countries—Economic conditions. 2. Debts, Public—Developing countries. 3. Financial crises—Developing countries. 4. International finance. I. Title. HC59.7.M488 2015 338.5'42091724—dc23 Typeset by MPS Limited, Chennai, India.

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Contents List of Figures and Tables

viii

Foreword by G. C. Harcourt

x

Preface

xi

Acknowledgements 1

xiv

Introduction: Financial Crises – An Inter-Temporal, Inter-National and Endogenous Capitalist Problem

1

A Keynesian and Post-Keynesian Theoretical Brief: Selected Concepts

15

3

Post-1980 Global Liquidity Data: Exponential Flows

38

4

Supply-Push: The Western-Induced En