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Why the ‘Rest’ doesn’t need foreign finance

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  • Bresser-Pereira, Luiz Carlos

Abstract

The Rest will be able to catch up and grow faster than the West only if it goes against a 'received truth', namely that capital-rich countries should transfer their capital to capital-poor countries. This intuitive truth is the mantra that the West cites to justify its occupation of the markets of developing countries with its finance and its multinationals. Classical Developmentalism successfully criticized the unequal exchange involved in trade liberalization, but it didn’t succeed in criticizing foreign finance. This task has been recently achieved by New Developmentalism and its developmental macroeconomics, which shows that countries will invest and grow more if they don’t run current account deficits, even when these deficits are financed by foreign direct investment

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  • Bresser-Pereira, Luiz Carlos, 2016. "Why the ‘Rest’ doesn’t need foreign finance," Textos para discussão 415, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    • Handle: RePEc:fgv:eesptd:415
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    References listed on IDEAS

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    1. Luiz Carlos Bresser-Pereira & Eliane Araújo & Paulo Gala, 2014. "An empirical study of the substitution of foreign for domestic savings in Brazil," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 15(1), pages 54-67.
    2. Hirschman,Albert O., 1981. "Essays in Trespassing," Cambridge Books, Cambridge University Press, number 9780521282437, September.
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    5. Bresser Pereira,Luiz Carlos, 2010. "Globalization and Competition," Cambridge Books, Cambridge University Press, number 9780521144537, September.
    6. Bresser-Pereira, Luiz Carlos & Ianoni, Marcus, 2015. "Developmental class coalitions: historical experiences and prospects," Textos para discussão 386, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    7. Reinhart, Carmen M. & Talvi, Ernesto, 1998. "Capital flows and saving in Latin America and Asia: a reinterpretation," Journal of Development Economics, Elsevier, vol. 57(1), pages 45-66, October.
    8. Schmidt-Hebbel, Klaus & Webb, Steven B & Corsetti, Giancarlo, 1992. "Household Saving in Developing Countries: First Cross-Country Evidence," The World Bank Economic Review, World Bank, vol. 6(3), pages 529-547, September.
    9. Fry, Maxwell J, 1978. "Money and Capital or Financial Deepening in Economic Development?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 10(4), pages 464-475, November.
    10. Bresser Pereira,Luiz Carlos, 2010. "Globalization and Competition," Cambridge Books, Cambridge University Press, number 9780521196352, September.
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