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Post Keynesian and structuralist approaches to boom-bust cycles in emerging economies

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Original languageEnglish
Title of host publication Emerging Economies and the Global Financial System
Subtitle of host publicationPost-Keynesian Analysis
EditorsBruno Bonizzi, Annina Kaltenbrunner, Raquel A. Ramos
ISBN (Electronic)9780429025037
ISBN (Print)9780367111427
Published5 May 2021

King's Authors


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.

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