What Global Economic Crisis?

by Arestis, Philip

• ISBN13: 9780333800171
• ISBN10: 0333800176
• Format: Trade Book
• Copyright: 2001-09-22
• Publisher: Palgrave Macmillan

Summary

With unprecedented trends towards globalization, the repercussions of economic crises are more profound than ever before, particularly for developing countries. What Global Economic Crises? bridges the gap between theory and policy-making by examining the destabilizing effects of financial crises on economic growth, stability, and development. It also presents innovative ideas intended to inform the design of institutions able to foster more effective international policy coordination.

Author Biography

Philip Arestis is Professor and Director of Research in Economics, South Bank Business School, London. Michelle Baddeley is Fellow and Director of Studies in Economics, Gonville and Caius College, Cambridge.

John McCombie is Fellow and Director of Studies in Economics, Downing College, Cambridge.

Table of Contents

List of Tables and Figures	ix
Foreword	xi
G. C. Harcourt
List of Abbreviations	xii
Notes on the Contributors	xiii
Introduction: What Global Economic Crisis?	1	(11)
Philip Arestis
Michelle Baddeley
John McCombie
If Markets are Efficient, Why Have There Been So Many International Financial Market Crises Since the 1970s?	12	(23)
Paul Davidson
Introduction	12	(1)
Why the Change Since 1973?	12	(2)
Alternative Theories of Financial Markets	14	(2)
Claims of Efficient Market Advocates and the Post-War Facts	16	(1)
A Lesson from the Gold Standard Era	17	(1)
Proposed Solutions and the `Third Way'	18	(3)
Liquidity, Uncertainty and the Stability of Markets	21	(2)
Liquidity and Orderly Markets	23	(2)
Irrational Exuberance and Bandwagon Behaviour	25	(1)
Policy Recommendations	26	(3)
Conclusion	29	(2)
Notes	31	(2)
References	33	(2)
Reforming the International Financial Architecture: An Asian Perspective	35	(24)
M. G. Quibria
Joy Quitazol
Introduction	35	(1)
The Trilemma of International Financial Architecture	36	(2)
Proposals for Strengthening the Architecture	38	(14)
Conclusions	52	(2)
Acknowledgements	54	(1)
Notes	54	(2)
References	56	(3)
An Agenda for a New Bretton Woods	59	(19)
John Grieve Smith
Introduction	59	(1)
Unstable Capital Flows	60	(4)
The Tobin Tax	64	(2)
Reforming the Exchange Rate System	66	(6)
Regulation and Crisis Management	72	(2)
A New Bretton Woods	74	(2)
Summary and Conclusions	76	(1)
References	77	(1)
Will the Euro Bring Economic Crisis to Europe?	78	(26)
Philip Arestis
Malcolm Sawyer
Introduction	78	(1)
The Institutional Policy Framework	79	(6)
The Problematic Nature of the Institutional Policy Framework	85	(14)
Summary and Conclusions	99	(1)
Acknowledgements	100	(1)
Notes	100	(1)
References	101	(3)
Globalization, the Distribution of Power, and Full Employment	104	(18)
John Cornwall
Wendy Cornwall
Introduction	104	(1)
Power	105	(3)
The Origins of the Social Bargain Regimes	108	(4)
Self-Reinforcing Tendencies	112	(1)
The Origins of the Market Power Regimes	112	(1)
Institutional Changes in the Labour Market	113	(1)
Globalization and Locking in the Market Power Regimes	114	(2)
Globalization and the Role of the Hegemony	116	(2)
Conclusions	118	(1)
Notes	119	(1)
References	120	(2)
Competition Policy, Development, and Developing Countries	122	(24)
Ajit Singh
Rahule Dhumale
WTO, Competition Policy and Development	122	(2)
The Global Merger Wave	124	(4)
Privatization, Deregulation and Competition Policy	128	(2)
Competition Policies in Advanced Economies: A Model for Developing Countries?	130	(2)
Economic Theory, Competition Policy and Development	132	(4)
Analytical Conclusions and Implications	136	(5)
Notes	141	(2)
References	143	(3)
A Brazilian-Style `Ponzi'	146	(32)
Gabriel Palma
Introduction	146	(3)
Financial Liberalization and Economic Reform in Latin America	149	(3)
The Brazilian Reforms	152	(11)
How to Sleepwalk into a (Public Sector) `Ponzi' Finance	163	(9)
Conclusions	172	(3)
Acknowledgements	175	(1)
Notes	175	(2)
References	177	(1)
Technology and Growth: Between Regionalization and Globalization	178	(25)
Pascal Petit
Introduction	178	(3)
What is New About the Present Phase of Internationalization?	181	(4)
How does Internationalization Affect the Growth Regimes of Nations?	185	(2)
On the Forms of Internationalization in a New Growth Regime	187	(5)
To What Extent are Regional Levels Relevant for Policies to Increase Growth?	192	(5)
Conclusions	197	(2)
Notes	199	(1)
References	200	(3)
The Keynesian Micro-Foundations of the Business Cycle: Some Implications of Globalization	203	(16)
Paul Ormerod
Introduction	203	(1)
The Microeconomic Model of Interacting Keynesian Agents	204	(5)
Model Simulations and Business Cycle Data	209	(3)
Implications for Globalization	212	(3)
Conclusion	215	(1)
Acknowledgements	216	(1)
Appendix: Derivation of an Analytical Solution of the Model	216	(1)
References	217	(2)
An Historical Perspective on Speculative Bubbles and Financial Crises: Tulipmania and the South Sea Bubble	219	(25)
Michelle Baddeley
John McCombie
Introduction	219	(1)
Theoretical Perspectives on Bubbles	220	(2)
Critiques of the Rational Expectations Approaches	222	(5)
A Reconsideration of Two Early Speculative Bubbles	227	(12)
Conclusions	239	(1)
Notes	240	(2)
References	242	(2)
John Cornwall: A Brief Appreciation	244	(7)
Mark Setterfield
Introduction	244	(1)
`Say's Law in Reverse': The Importance of Demand in a Capitalist Economy	245	(1)
Conflict, Uncertainty and Institutions	245	(1)
Path Dependence and Evolutionary Keynesianism	246	(1)
Outstanding Issues: Towards the Further Development and Application of Evolutionary Keynesianism	247	(2)
Acknowledgements	249	(1)
Notes	249	(1)
References	249	(2)
Index	251