Volume 43, Number 168,
January-March 2012

Latin America in the Era of Globalization, Susana Nudelsman, 1st ed., Professional Council of Economic Sciences, Buenos Aires, 2010, 116 p.

What is globalization? When it comes to such a highly used term, there does not appear to be an exact definition that is currently widely accepted. Many meanings have been attributed to the word and these seem to increase rather than come together in the form of a conclusion, acquiring cultural, political, social as well as economic connotations in the process. According to Susana Nudelsman, economic globalization refers to the tendency of people, companies and governments of the world to further integrate and increase their interdependence.

In this book, Dr. Susana Nudelsman, a researcher at the Professional Council of Economic Sciences at the University of Buenos Aires, examines the effects of the process of globalization in Latin America from a historical perspective and the phenomena of trade and financial expansion. She highlights the surges of financial crises associated with these processes and outlines the major events of crises in Argentina, Brazil, Chile and Mexico, as well as East Asia during the 1990s and the beginning of the present decade. The author's objective is to clarify one of the crucial issues facing the region in current economic reality.

The following sections, together with the conclusion, comprise the contents of this book:

"Globalization from a Historical Perspective," "Globalization Today: A Surge of Financial Crises," "Crisis in Developing Countries: Crisis in Latin America and East Asia," "Analytical Crisis Models," "Crisis and Recovery in Latin America," and "Latin America in the Context of Economic Crisis."

In the first chapter, "Globalization from a Historical Perspective," Susana Nudelsman provides a summary of world historical events that have shaped what we know today as globalization: economic integration since 1870, large-scale eighteenth century trade and the Industrial Revolution in Europe, the United States and Japan, placing trade flows and great periods of trade integration in historical context.

Dr. Nudelsman links the history of globalization with the present when she states that the "forces of globalization have brought about the colossal expansion of the global financial system in the last two decades." She presents her view of the constitution of the crisis, as well as different types of crises: the currency crisis, characterized by a strong change in parity, a fixed exchange rate guarantee and an interest rate increase to defend the currency or a sharp fall in international reserves; the banking crisis; the twin crisis, where there is a currency and banking crisis in the same or adjacent years; the systemic financial crisis; and an external debt crisis, which suggests that the country in question is not in a position to pay its debt.

In the chapter "Crisis in Developing Countries: Crisis in Latin America and in East Asia," major crises in Latin America are summarized, particularly those of Argentina, Brazil, Chile and Mexico, as well as the growth and accumulation models implemented by these countries and the subsequent success or failure for their respective economies. In the second part of this chapter, the author undertakes the same analysis for the East Asian crisis, examining the consequences for the region resulting from the economic growth models implemented.

The author develops the chapter "Crisis and Recovery in Latin America" through an analysis of the principal factors leading to crisis in the most significant countries of the region in relation to exchange rate regimes, banking and currency, taxation authorities and debt, capital account, and capital controls. The author seeks to answer the question, "What have we learnt?" by addressing the following topics: "Exchange Rate Regimes," "Banks and Money," "Tax Authorities and Debt," and "Capital Account." She develops this section of the book didactically, examining the factors leading to crisis in Latin America.

The chapter "Latin America in the Context of the Current International Economic Crisis" begins with the main historical aspects of the international economic crisis, developing the following themes: economic policy, exchange rate flexibility, the Group of 20 -G20- and international economic architecture, related agreements, the key role of the World Bank, and future prospects, such as the future of globalization by posing the question "Is Globalization really finished?" "For a quarter of a century, global finances appeared to be of a golden age. Globalization permitted access to capital on a vast scale. Businesses were able to undertake new endeavors, while individuals considerably increased their level of debt and foreign currency transactions undertaken. Globalization was seen as a promising opportunity, although in reality was highly problematic." In theory we have a better understanding of the crisis. There are better monetary instruments in Latin America than in the past to face such situations. Susana Nudelsman makes various important conclusions in this book and leaves several questions unanswered such as: When will it be possible to devise an exchange rate regime immune to crisis? How is the inherently unstable nature of finance to be handled? Can the vulnerability of capital reflows be reduced in a world of high capital mobility? We still do not know whether globalization is a completely irreversible phenomenon.

Héctor González Lima
Institute of Economic Research -unam
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Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 48, Number 191, October-December 2017 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
CP 04510, México, D.F. Tel (52 55) 56 23 01 05 and (52 55) 56 24 23 39, fax (52 55) 56 23 00 97, www.probdes.iiec.unam.mx, revprode@unam.mx. Journal Editor: Alicia Girón González. Reservation of rights to exclusive use of the title: 04-2012-070613560300-203, ISSN: pending. Person responsible for the latest update of this issue: Minerva García, Circuito Maestro Mario de la Cueva s/n, Ciudad Universitaria, Coyoacán, CP 04510, México D.F., latest update: Nov 13th, 2017.
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