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Financialisation (Comparison (Both economies are halted, in terms of GDP…
Financialisation
Comparison
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Both economies are halted, in terms of GDP by financialisation
short term, unstable investments increased rapidly in both countries
McKinley and Cripps (2018) both economies are NOT balanced, vulnerable to shock and crises
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Short term loans in domestic currency double the amount than in Mexico, in terms of % of their GDP
TNCs powerful in Mexico, more domestic presence in Brazil (penetration of foreign capital is however still very present)
Mexico (Correa, Vidal and Marshall, 2012)
Balance of payments- financial liabilities 100, foreign exchange reserves 15
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Has reached all sectors of the economy Correa, Vidal and Marshall (2012)
labour market, local firms, health care, enterprises, public and foreign banks
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Brazil (Kantenbrunner and Painceira, 2017)
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Balance of payments- financial liabilities 75, foreign exchange reserves 10
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Definitions
FDI
long-term investment by a foreign firm, more stable form of investment
Portfolio investment
constitutes equity and bond flows of various types, often provided by international pension funds, mutual finds, etc, relatively short term, passive form of investment, unstable
'other' investment
a conglomerate, residual term, variable and often unstable investment but this category has risen in magnitude in recent decades
Financialisation
Epstein (2005)
Financialisation means the increasing role fo financial motives, financial markets, financial actors and financial institutions in the operation of the domestic and international economies
Lapavistas, (2017)
Structural changes in the financial relations, practices and needs of key agents; banks, households, and non-financial corporations
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Financialisation
most material focused on core capitalist economies, emerging capitalist economies are often not accounted for
Currency hierarchy (Kaltenbrunner and Painceira, 2017)
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there needs to be a balance between a states external financial liabilities and their foreign exchange reserve, (% of GDP) in order to be stable
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