Edit2: added Key Points information

Key Points:

  1. Common Currency Misconceptions: A common BRICS currency isn’t intended to replace national currencies. Instead, it will serve as a unit for trade clearing, thus avoiding potential pitfalls seen in the Euro’s design.
  2. Regional Cooperation Importance: Global South countries should collaborate to leverage their diverse resources, enhancing trade and investment opportunities, thereby fostering mutual growth.
  3. Local Currency Borrowing Strategy: Increasing local currency borrowing helps countries avoid vulnerabilities associated with foreign debt, allowing them to focus on domestic development.
  4. Clearing Unit Mechanism: A common clearing unit can streamline trade between countries without direct implications for their domestic currencies, promoting smoother economic interactions.
  5. Need for International Reform: The current international financial system requires revamping to better support developing economies, addressing issues like climate financing and equitable resource distribution.
  6. Domestic Resource Mobilization: Countries must prioritize using their domestic resources for development, reducing reliance on foreign borrowing, and building a more resilient economy.
  7. Preventing Currency Hoarding: Establishing rules against the accumulation of common currency units is vital to ensure equitable use and prevent economic disparities between countries in the BRICS alliance.

[Part 2 of 2]

The BRICS financial system won’t be a copy/paste of western institutions and it will certainly not be a second “Euro”. Nobody would be that foolish again. Instead, the financial architecture will be a decentralised system build on the convertibility of currencies and potentially a common unit of account to replace the dollar’s function as a world wide price tag.

This is the second part of a talk with Dr. Yan Liang, a Professor of Economics at Willamette University, a private liberal arts college in the US. She is also a Research Associate at the Levy Economics Institute and a Non-Resident Senior Fellow at the Global Development Policy Center of Boston University.

Yan specializes in Modern Monetary Theory (MMT), the Political Economy of China, Economic Development, and International Economics.

China’s BIGGEST Debt Problem Is Local. MMT Explains Why. | Prof. Yan Liang

[Part 1 of 2] https://youtu.be/rM174ufXeNg

With one of the strongest and most sovereign currencies in the world, does China really have anything to worry about when it comes to monetary or fiscal policy? Well, yes, local government debt turns out to be quite a structural problem. One, however, with a relatively simple fix, at least absent domestic power politics.

Today I’m talking to Dr. Yan Liang, who is a Professor of Economics at Willamette University, a private liberal arts college in the US. She is also a Research Associate at the Levy Economics Institute and a Non-Resident Senior Fellow at the Global Development Policy Center of Boston University.

Yan specializes in Modern Monetary Theory (MMT), the Political Economy of China, Economic Development, and International Economics.