In the context of the current financial crisis the article returns to the ideas of Keynes for an international clearing house. In exploring the intellectual basis for Keynes’s economics—namely uncertainty and liquidity preference—the article identifies theanti-developmental characteristics of US$-based international monetary system: (1) financial volatility and recurrent crises, (2) costly excessive international reserves, (3) the fundamental asymmetry of a system in which developing countries finance theUS. Collectively these result in global deflationary tendencies which are caused less by a lack of liquidity than systemic inefficiencies. Keynes’s plan offers a solution to all of these problems.
Read the Ipaper for the Full Paper "Financing for Development and the Post-Keynesian Case for a New Global Reserve Currency"
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