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Current global imbalances and the Keynes Plan: A Keynesian approach for reforming the international monetary system

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  • Costabile, Lilia

Abstract

This paper proposes a "logical experiment", illustrating how alternative international monetary systems may produce opposite results in the global economy. In the current organisation, "key currencies" work as international money. Keynes, by contrast, proposed that this role should be assigned to a supranational, "credit" money. While the world currently lives in an asymmetric regime, which lead to what has been defined as a "balance of financial terror", Keynes tried to achieve a more peaceful type of "international balance". I argue that the structural reform and the technical provisions proposed by the "Keynes Plan" may still - at least in principle - provide useful remedies for international disequilibria, by remedying the asymmetries of the current international payments architecture and helping to curb both inflationary and deflationary pressures on the world economy.

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  • Costabile, Lilia, 2009. "Current global imbalances and the Keynes Plan: A Keynesian approach for reforming the international monetary system," Structural Change and Economic Dynamics, Elsevier, vol. 20(2), pages 79-89, June.
    • Handle: RePEc:eee:streco:v:20:y:2009:i:2:p:79-89
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    2. Bánfi, Tamás & Kürthy, Gábor & Bánfi, Attila, 2011. "Regulation following (between) financial crisis (crises): compulsion and opportunity," Public Finance Quarterly, Corvinus University of Budapest, vol. 56(2), pages 193-213.
    3. Pilar Valencia-DeLara & Alberto Ramírez-Ceballos, 2012. "A tool applicable to the payment of credits for projects of agricultural crops with different income levels," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 58(5), pages 231-221.
    4. Lino Sau, 2015. "Do the International Monetary and Financial Systems Need More Than Short-Term Cosmetic Reforms?," International Journal of Political Economy, Taylor & Francis Journals, vol. 44(4), pages 325-340, October.
    5. Dariusz Urban, 2011. "Macroeconomic Considerations and Motives of Sovereign Wealth Funds Activity," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 5(2), June.
    6. Golemi, Ela & Muço, Klodian, 2020. "Complementary currency as an instrument for economic development in the western Balkans," SEER Journal for Labour and Social Affairs in Eastern Europe, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 23(1), pages 77-90.
    7. Ernesto Screpanti, 2010. "La grande crisi e l’imperialismo globale," Department of Economics University of Siena 590, Department of Economics, University of Siena.
    8. Rahman, Abdurrahman Arum, 2022. "A Decentralized Central Bank Digital Currency," MPRA Paper 111361, University Library of Munich, Germany.
    9. David Hudson, 2010. "Financing for development and the post Keynesian case for a new global reserve currency," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(6), pages 772-787.

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