The Financialization Response to Economic Disequilibria
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The Financialization Response to Economic Disequilibria

European and Latin American Experiences

Edited by Noemi Levy and Etelberto Ortiz

Europe and Latin America’s social and economic stagnation is a direct result of the unresolved phenomena of the financialization crisis that broke out in 2008 in developed countries. Editors Noemi Levy and Etelberto Ortiz analyze the limitations of economic growth and development under capitalist economic organizations where financial capital is dominant, as well as explore alternative economic policies.
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Chapter 14: Pro-cyclical fiscal policy and the fiscal support of the Mexican monetary policy

Luis Á. Ortiz


In the chapter, ‘Pro-cyclical fiscal policy and the fiscal support of the Mexican monetary policy,’ the author argues that monetary policy based on a system of fiscal and financial targets generates a contraction in capital spending and higher quasi-fiscal and financial costs. This is due to an oversupply of foreign exchange causing sterilized interventions in the foreign exchange market. As a result, it is noted that the behavior of the Bank of Mexico, in exercising its autonomy in pursuit of an inflation target, has an anti-democratic bias, not only due to the fiscal support it receives from the government, but also because it prevents the counter-cyclical exercise of fiscal policy.

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