Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The project in which the book has its origins Growth with Financial Stability and New Developmentalism is part of the Ford Foundation project on financial stability and democratic governance. The crucial role played by the exchange rate in economic development and in financial crises is explained in the first part of the book. In the second part of the book we discuss the central problem behind the 2008 global financial crisis: the deregulation of financial markets. The third and fourth parts of the book focus on Brazil and consist of contributions from Brazilian economists. The fourth part of the book is devoted to financial regulation in Brazil. Daniela Magalhaes Prates opens this part with a broad discussion of how to evaluate financial regulation of Brazil. The author argues that gradual but deep liberalization increased Brazil's vulnerability to balance of payment crises.