Title
Currencies, Capital Flows and Crises: A post Keynesian analysis of exchange rate determination (Routledge Advances in Heterodox ,Used
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Breaking from conventional wisdom, this book provides an explanation of exchange rates based on the premise that it is financial capital flows and not international trade that represents the driving force behind currency movements. John T. Harvey combines analyses rooted in the scholarly traditions of John Maynard Keynes and Thorstein Veblen with that of modern psychology to produce a set of new theories to explain international monetary economics, including not only exchange rates but also world financial crises.In the book, the traditional approach is reviewed and critiqued and the alternative is then built by studying the psychology of the market and balance of payments questions. The central model has at its core Keynes analysis of the macroeconomy and it assumes neither full employment nor balanced trade over the short or long run. Market participants mental model, which they use to forecast future exchange rate movements, is specified and integrated into the explanation. A separate but related discussion of currency crises shows that three distinct tension points emerge in booming economies, any one of which can break and signal the collapse. Each of the models is compared to postBretton Woods history and the reader is shown exactly how various shifts and adjustments on the graphs can explain the dollars ups and downs and the Mexican (1994) and Asian (1997) crises.
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- Q: What is the main focus of the book 'Currencies, Capital Flows and Crises'? A: The book focuses on explaining exchange rates through financial capital flows, arguing that these flows are the primary drivers of currency movements, rather than international trade.
- Q: Who is the author of 'Currencies, Capital Flows and Crises'? A: The author of the book is John T. Harvey.
- Q: What unique perspectives does John T. Harvey incorporate into the book? A: John T. Harvey combines insights from the scholarly traditions of John Maynard Keynes and Thorstein Veblen with modern psychological approaches to create new theories in international monetary economics.
- Q: How does the book critique traditional economic theories? A: The book reviews and critiques traditional economic approaches to exchange rates and builds an alternative framework based on market psychology and balance of payments dynamics.
- Q: What is the significance of the central model discussed in the book? A: The central model is significant because it is based on Keynes’ analysis of the macroeconomy, assuming neither full employment nor balanced trade, thereby providing a more realistic view of economic conditions.
- Q: Are there discussions about currency crises in the book? A: Yes, the book includes a discussion of currency crises, highlighting three tension points in booming economies that can signal potential collapses.
- Q: How does the author relate the theories to historical events? A: The author compares the developed models to post-Bretton Woods history, illustrating how shifts in the economic graphs can explain historical currency fluctuations, including the dollar's movements and crises in Mexico and Asia.
- Q: What is the length and binding of the book? A: The book is 176 pages long and is available in paperback binding.
- Q: When was 'Currencies, Capital Flows and Crises' published? A: The book was published on January 15, 2009.
- Q: What kind of reader would benefit from this book? A: This book would benefit students, scholars, and professionals interested in economics, particularly those looking for alternative analyses of exchange rates and monetary economics.