Financial repression and economic development: towards a post-Keynesian alternativeFootnote^∗
^∗This article is the 1992 winner of the Alfred Eichner Scholarship.

Rogério Studart University College London, This article has been developed from work done for my Ph.D. dissertation under the supervision of Victoria Chick. She is warmly thanked. Thanks are also due to Fernando C. Carvalho, Arlindo Villaschi, Fabio Giambiagi and for detailed and perceptive comments and to A. J. James for both editorial and substantive comments. I am especially grateful to an anonymous referee, whose extensive comments, in addition to enriching my knowledge about the topics discussed in this article, encouraged me to proceed with the research I am still undertaking at University College. The financial suport from the Brazilian National Council for Technological and Scientific Development (CNPq) is gratefully acknowledged. The usual caveats, of course, appl.

Abstract

The Shaw–McKinnon framework, the foundation of mainstream thinking on the role of financial markets and institutions in economic development and the basis for policy-making in many LDCs for the last 18 years, is shown to be flawed when viewed in a post-Keynesian perspective. Three interrelated aspects of post-Keynesian theory are used to challenge the financial liberalization models and to posit an alternative post-Keynesian perspective on the role of financial institutions and markets in economic development. These aspects are: (1) the finance-investment-saving-funding circuit; (2) the financial fragility hypothesis; and (3) the evolution of institutions and conventions in an uncertain world.

^∗This article is the 1992 winner of the Alfred Eichner Scholarship.

Notes

^∗This article is the 1992 winner of the Alfred Eichner Scholarship.

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Financial repression and economic development: towards a post-Keynesian alternativeFootnote^∗
^∗This article is the 1992 winner of the Alfred Eichner Scholarship.

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Financial repression and economic development: towards a post-Keynesian alternativeFootnote∗∗This article is the 1992 winner of the Alfred Eichner Scholarship.

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Financial repression and economic development: towards a post-Keynesian alternativeFootnote^∗
^∗This article is the 1992 winner of the Alfred Eichner Scholarship.