Alain Parguez and Monetary Circuit Theory: Keys to Understanding the Development of Economies with a Double Monetary Standard

Abstract

The Monetary Circuit Theory is a key framework to understand the complexity of the insertion of countries with double monetary circuits into the international monetary circuits. In this article, we develop Parguez’s essential ideas for the study of developing countries precisely at a time when financial tensions are being exacerbated due to the pandemic and its consequences as well as to war conflicts internationally. In this essay, we collect the main contributions of Alain Parguez in relation to his theory of the double monetary circuit, which he had expressed in chapters of books published in English and French, later published in Spanish in the journal Ola Financiera and by the Latin American Council of the Social Sciences (CLACSO), as a tribute to a great economist interested in developing countries with a double monetary circuit. Delving into Parguez’s thought provides us with elements to understand monetary economies of production where a general global monetary equivalent coexists with a general equivalent assigned to a national monetary space. The causal relationship between both currencies determines the process of capital accumulation in developing economies, whose formation is anchored to the interests of economic agents that dominate the productive and financial markets.