The International Monetary Fund issued new guidelines on the use of capital account regulations, and GDAE’s co-sponsored Task Force on Regulating Capital Flows has continued to track and engage with the process. In a widely syndicated piece for the Project Syndicate, Gallagher called the reforms an important “half step,” important for acknowledging the value of such tools for developing countries to prevent damaging swings in currency values and contagion from international financial markets. His Pardee Policy Brief, “The IMF’s New View on Financial Globalization: A Critical Assessment,” goes into more detail. His Financial Times piece circulated widely, as did a piece on the issue by The Globalist, which appeared in China Daily, Valor Econômico (Brazil), The Financial Express (India). Gallagher also authored a provocative article in Global Policy, “Social Costs of Self-Insurance” that shows that the another way to regulate capital flows—by accumulating foreign exchange reserves—can be quite costly for emerging market and developing countries.
GDAE released new analysis of the incompatibilities between the new recognition of the validity of capital regulations and most U.S. trade agreements, which prohibit them. Gallagher teamed with the co-chair of a Pardee Task Force Leonardo E. Stanley to publish a policy brief, “Global Financial Reform and Trade Rules: The Need for Reconciliation,” in advance of the full Task Force Report, slated for release in March. Gallagher reiterated the contradictions in meetings with congressional leaders, and published his perspective in Al Jazeera, “Trade rules should not constrain fixing global finance.” While GDAE continues its work on Capital Flows and Development, Gallagher has been awarded a grant from the Institute for New Economic Thinking (INET) to collect some of his analysis on capital flows into a book.
Read the rest of this entry »
What We’re Reading
Goran Therborn, Class in the 21st Century
Michael Reich, The Rising Strength of Management, High Unemployment and Slow Growth: Revisiting Okun’s Law (Thomas Weisskopf Festschrift Conference Paper)
Yanis Varoufakis: Will the Real Economy Rebound Following Wall Street’s Resuscitation
Michael Hudson, Reality Economics
What We’re Writing
Jayati Ghosh, C.P. Chandrasekhar: India’s Growth Story, A Comparative View
Matias Vernengo, Macroeconomics and the Financial Cycle
Sunita Narain, Inaction in the Face of Urgency
Martin Khor, Solving the Emerging Debt Crises
Edward Barbier, A New Blueprint for a Green Economy