This paper examines the extent to which Keynesian thinking could help understand the causes and dynamics of crises in emerging markets and provide suitable policy prescriptions. It concludes that at the analytical level the endogenous unstable dynamics analyzed by post Keynesians, notably Hyman Minsky, goes a long way in providing a powerful framework for explaining the boom-bust cycles driven by international capital flows in emerging markets. The paper also points out the need to develop new instruments for stabilization, placing greater emphasis on countercyclical financial regulations and control than has hitherto been the case.
  
February 29, 2008.