ABSTRACT
This chapter presents iconic economic models of cross-border financial crises and current/capital account imbalances. The asymmetric power of core nations in relation to peripheral nations—immunity from speculative attack—constitutes a severe danger for the latter. The chapter shows how financial geography can cover gaps left in economists’ explanations with historically informed analyses that open up richer analyses of power and of the ‘social reality of finance. Cross-border problems at the global level—and, specifically, financial crises and current and capital account imbalances—are used here as a test-ground for evaluating the possible contributions of a financial geography. Projections of any of the various cross-border powers are sufficient to qualify a nation for the global financial core. The provocative assertions imply a bold claim: financial geography can fill important explanatory gaps in economists’ accounts of financial phenomena with a spatial dimension.
