Abstract
The chapter reviews and discusses Post Keynesian and structuralist (PK-S) approaches to boom-bust cycles in emerging market economies (EMEs). Business cycles in EMEs are considerably more volatile compared to rich countries and are characterised by procyclical capital flows and exchange rates, strongly countercyclical trade balances, and external crises during recessions. These stylised facts are linked to certain structural features of EMEs, such as openness, external financial vulnerability, currency mismatches, and high exchange-rate pass-through. The chapter assesses the success of PK-S in capturing these structural features and explaining the stylised facts. It concludes that, over time, PK-S models have devoted more attention to exchange rate flexibility and that Minskyan models of finance-driven business cycles are better equipped to capture the experience of EMEs. Future areas for research are empirical calibration and the explicit modelling of macroeconomic policies.
| Original language | English |
|---|---|
| Title of host publication | Emerging Economies and the Global Financial System |
| Subtitle of host publication | Post-Keynesian Analysis |
| Editors | Bruno Bonizzi, Annina Kaltenbrunner, Raquel A. Ramos |
| Publisher | Routledge |
| Chapter | 5 |
| Pages | 56-69 |
| Number of pages | 14 |
| ISBN (Electronic) | 9780429658358 |
| ISBN (Print) | 9780367111427 |
| DOIs | |
| Publication status | Published - 5 May 2021 |