Michael wrote: > I am presently reading Reinhart and Rogoff's new book. > > Reinhart, Carmen M. and Kenneth S. Rogoff. 2009. This Time > Is Different: Eight Centuries of Financial Folly (Princeton: > Princeton University Press). > > The book is an encyclopedic study of crises through the lens > of monetarism and public finance. The authors also casually > bandy about the expression, "financial repression," for any > policy that inconveniences the financial system.
I am almost 100% sure that this term -- as used by Roubini or Rogoff -- is due to Ronald McKinnon, who I believed proposed it first in his 1973 book, Money and Capital in Economic Development. McKinnon is a very astute and knowledgeable fellow who studied South American economic problems in great depth. You may say he is (or was) a "neoliberal" but of the pragmatic type with a strong sense of the latent strength of nationalism in the developing world. When Sachs et alia went around supplying advice to Russia and other Eastern European countries about how to best transition to capitalism, McKinnon was horrified by their "shock therapy" approaches. McKinnon wrote an article in the early 1980s on the proper sequence in which liberalization had to proceed from countries with "financially repressed" systems. His article drew from the experience of South American countries in the 1970s. He thought that largely a similar sequence to the one he prescribed for Latin America had to be followed in Russia and Eastern Europe in the early 1990s, and Asia in the mid 1990s. Basically, you move very slowly in expanding concentric circles, from the central government finances to -- at the very end -- international trade and international financial integration. Liberalizing the financial system of a developing economy was the last thing in his list. Needless to say, the neoliberals didn't consider him one of their own. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
