Dance of the Trillions

Developing Countries and Global Finance

David Lubin

• Publisher: Brookings Inst. Press/Chatham House
• Year: 2018
• ISBN:
  9780815736752
• Topic: Economics
• Subtopic: Development Economics
• Index: Economics

Just after the end of the First World War, Cuba's economy soared on rising sugar prices and a favorable global climate for Cuban sugar. In the first half of 1920, credit and finance flowed into the island nation, furthering the "Dance of the Millions," as the good times were called. But by the end of 1920, tightening U.S. monetary policy and recovering European production changed Cuba's boom to a bust.

In Dance of the Trillions, David Lubin tells the story of what makes money flow from high-income countries to lower-income ones, and what makes it flow out again. He follows a trajectory from the emergence of petrodollars, global inflation, and the U.S. Federal Reserve in the 1970s; to Latin America's "lost decade" of the 1980s; to the rise of China since the early 2000s.

Looking ahead, Lubin explores how the relationship between developing countries and international finance seems to be moving from a "Washington Consensus" to one shaped by Beijing.

Index

Agriculture exports, 14, 15, 24

Algeria, current account balance in, 27

Ali, Anwar, 23

Allende, Salvador, 30

Angola, exports from, 94

Arab-Israeli War (1973), 19

Argentina: capital flight from, 33; credit demand in, 28; currency rates in, 15, 55, 57–58, 91, 120; financial crisis (2001), 9, 42, 89–90; IMF loans to, 82; inflation in, 58

Asian financial crisis (1997), 9, 39, 42, 51–54, 73, 104

Asian Infrastructure Investment Bank, 123

Bagehot, Walter, 43

Baker, James, 45

Baker 15 Plan, 28, 45–46

Banco de la República (Colombia), 67

Banco do Brasil, 29

Banco Español (Cuba), 2

Banco Nacional (Cuba), 2

Bank for International Settlements, 113

Banque Commerciale pour L’Europe du Nord, 24

Basel Committee on Banking Supervision, 56

Beijing Consensus, 109–28; and Belt and Road Initiative, 122–24; and capital accounts, 114–19; and “crisis-proofing” of emerging markets, 119–22; and managed convertibility, 111–14

Belize, as emerging market, 6

Belt and Road Initiative (China), 122–24

Bernanke, Ben, 113

BNDES (Brazil), 29

Bolivia: credit default, 15; credit demand in, 28; inflation in, 68

Bolsa Família (Brazil), 94

Bond sales, 14–15

Brady, Nicholas, 46

Brady Plan, 46–47

Brazil: capital controls in, 11, 114; capital flows in, 32, 120; China dependence of, 97; credit demand in, 27, 28, 29; currency rates in, 59, 91, 120; current account balance in, 60, 91; economic growth in, 21, 25, 71; as emerging market, 6; exports to China, 94; FDI to, 75; financial crisis (1999), 9, 36, 42, 62, 89–90, 96; import-substituting industrialization in, 69; infrastructure development in, 125; recession in, 120; state power in, 29

Bretton Woods regime, 12–13, 21–22, 31, 69, 110, 128

Buchheit, Lee, 41

Bulgaria, FDI to, 74

Camdessus, Michel, 78–79, 116

Cameroon, as emerging market, 6

Capital controls: and currency rates, 127–28; in emerging markets, 116; and FDI, 115; and IMF, 116–17. See also specific countries

Capital flight, 32–33

Capital flow management measures (CFMs), 11, 117

Capital flows: and credit demand, 26; “cycle” of, 11; and emerging markets, 72–76, 79–81; and financial crises, 41; and globalization, 9–13. See also Liberalization of capital flows; Liquidity is...

Table of contents

• Cover
• Series Page
• Title Page
• Copyright
• Dedication
• Contents
• Acknowledgments
• Introduction: What’s Past Is Prologue
• One: Enter Finance: The 1970s
• Two: Exit Finance: Two Decades of Crisis
• Three: Explaining Emerging Markets
• Four: Thank You, China!
• Five: Toward a Beijing Consensus
• Notes
• Index