Austerity Breeds Financial Protectionism
Advanced economies did not simply abandon capital controls after the 1944 Bretton Woods Agreement. Martino Comelli and Pedro Perfeito Da Silva show that welfare states quietly took over their job. Countries that protect workers can afford open financial borders. Countries that spend mainly on pensioners still police the movement of money
Summary
Advanced economies have shifted from traditional capital controls to welfare state mechanisms that manage financial flows. The article examines how different spending priorities influence countries’ approaches to financial protectionism.
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