Financialisation in Latin America: Challenges of the Export-Led Growth Model (Routledge Critical Studies in Finance and Stability)

Financial capital continues to dominate Western economic organisations, despite major financial and economic crises. While these have not affected Latin American countries in the same way, other economic problems emerged after the reversion of loose monetary policies that debilitated the export-led growth model. This book discusses the issue of the financialised globalisation model in Latin America, looking at the region's relationship with the international market.This edited collection is divided into three main sections. The first section discusses regional trends highlighting issues of trade and payments in financialised economies, the impact on deindustrialisation, its effect on inequality, external capital movements and monetary policies. The second section analyses the failure of comparative advantages of the export-led model in Colombia, Argentina and Mexico. Finally, the last section deals with the growth of financial balance sheets in small and developing economies such as Chile; how growth, investment and big corporation evolution were affected in Brazil and Mexico; and the effects of foreign exchange activity in Mexico. Through these discussions, this book aims to deepen the understanding of the crisis of financialisation and the export-led model, raising the question of whether it is possible for this model to continue or if it requires major readjustments to unfold economic growth.This book provides a distinctive analysis of the financialisation mechanisms in developing countries in order to emphasise affinities and differences between the countries of the region in productive and financial terms. It will be of great interest to economic and social science scholars and students, to journalists specialising on economic and development issues, and, more importantly, to policy makers. Cover 1 Half Title 4 Series Page 5 Title Page 6 Copyright Page 7 Contents 8 List of figures 11 List of tables 13 List of contributors 14 Acknowledgements 16 Introduction 18 PART I: Regional trends 28 1 Multilateralism and regional trade and payments 30 2 Capital inflows, current account deficits and deindustrialisation in Latin American commodity- producing economies 40 3 Limits and perspectives of export-led growth model and foreign direct investment in Latin America and Mexico 55 4 Internationalisation, big corporations and capital accumulation in the Latin American experience 72 5 Financialisation and economic inequality in Latin America 89 6 The effect of inflation target regimes in commodities-based, financialised economies on income growth and distribution in Latin America 103 PART II: The failure of comparative advantages 120 7 Structural change in Colombia: from import substitution to export-led growth illusion 122 8 Financialisation of commodities, reserve accumulation and debt in Argentina 137 9 A sectoral analysis of Mexico’s external economic opening (1982–2016) 156 10 The natural resource curse and financial development of Mexico 175 PART III: The growth of financial balance sheets 194 11 Financialisation in a small, open developing economy: the case of Chile 196 12 Financialisation, growth and investment in Brazil 216 13 Financial structure and big corporations in scenarios of increasing indebtedness in Mexico 235 14 Financial capital flows and FOREX activities in Mexico: finance or speculation? 251 15 Exchange rate policy restrictions on a high-volatility environment: the Mexican currency 266 Index 282 This book analyses the evolution of financialisation in Latin America and seeks to determine the causes of the economic crises that have been triggered throughout the region in recent years. The discussion includes both regional and by-country analyses to determine shared trends and particularities of the various crises in different countries.