The International Monetary System’s Structural Flaws, a Process of Economic Development, and the Job Guarantee

Abstract

The international monetary system currently suffers from three structural flaws that disproportionately affect developing nations: an asymmetric balance of payments adjustment mechanism, the Triffin Paradox, and an inequity bias against developing nations. Thus, as currently constituted, this global monetary framework is biased against the development prospects of developing nations and is antagonistic to their development efforts. However, the author’s contention is that developing countries can use a Job Guarantee (JG) to address these shortcomings because it offers five significant international macroeconomic benefits that involve presenting developing nations with an enhanced degree of domestic policy options, altering how global liquidity is provisioned and the need for acquiring it, and inciting a direct challenge to the neoliberal conventional wisdom of global political economy. As a result, developing nations can use a JG as a cornerstone in any development strategy that seeks to sustainably mobilize underemployed labor resources and increase productive capacity and utilization rates while remaining free of the structural constraints imposed by the international monetary system. JEL Classification: B52, O11, F40