Deficit Spending and International Currency Governance. From the Structural Reforms of the Washington Consensus to Currency Multipolarity (1989-2022)

"Deficit Spending and International Currency Governance: From the Structural Reforms of the Washington Consensus to Currency Multipolarity (1989-2022)" by Andrea Pomella examines the evolution of deficit spending policies and international currency governance in the context of the structural reforms advocated by the Washington Consensus. The paper highlights how the economic recommendations of the Washington Consensus, starting in the late 1980s, influenced global economic globalization, leading to financial market instability. The author traces key developments, from the establishment of inflation targeting as a tool for economic stability to the adoption of fixed exchange rate regimes in developing countries. The analysis includes critiques that emerged after the Asian financial crisis and the 2008 global financial crisis, which questioned the resilience of the global financial system. The paper also explores the ongoing process of "de-dollarization", driven by emerging economies such as China and Russia, and the development of a multipolar currency system. The conclusion suggests that global financial instability and the challenges posed by the dominance of the U.S. dollar may lead to a new international monetary architecture, possibly involving a return to reformulated Keynesian policies.