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Iain Hardie is a senior lecturer in international relations at the School of Social and Political Science at the University of Edinburgh. His research interests include issues surrounding financial globalization, especially financialization and varieties of financial capitalism, focusing on the implications for both developed and developing countries.

Sylvia Maxfield is a professor and dean of the School of Business at Providence College. Her interests include corporate social responsibility, social impact accounting, and financial markets and regulation.

Abstract: Hardie and Maxfield address the impact on international monetary power of the size and nature of the US’s international financial assets and liabilities. Financial globalization makes critical a focus on a nation’s international financial assets and liabilities, its ’external balance sheet’. They suggest an expansion of Cohen’s existing framework of international monetary power to include the implications of valuation changes in these external balance sheets, focusing on sources of valuation, sensitivity of the US economy to these changes and implications for US ability to use monetary statecraft. By focusing on developments since 2007 and on events over the financial crisis period, they show that the increased size and nature of the US’s external balance has reduced US monetary power. Underpinning the changes in the US’s external balance sheet are activities of private financial market actors whose influence in international monetary affairs has grown markedly. 

Dowload the paper here. 

Political Economy and Labor Seminar

Co-sponsored by the William R. Rhodes Center for International Economics and Finance.