CHAPTER 1. The Political Economy of Financial Crises

2007 ◽  
pp. 9-30
Keyword(s):  
Political Economy ◽  
Financial Crises ◽  
The Political

scholarly journals The Political Economy of Bilateral Bailouts

2020 ◽  
Vol 74 (1) ◽  
pp. 1-29 ◽  
Author(s):  
Christina J. Schneider ◽  
Jennifer L. Tobin
Keyword(s):  
Political Economy ◽  
Financial Crises ◽  
Domestic Politics ◽  
Complex Structure ◽  
Spillover Effects ◽  
The Political ◽  
Central Component ◽  
Theoretical Argument ◽  
Data Set ◽  
Trade Offs

AbstractIMF loans during times of financial crisis often occur in conjunction with bilateral financial rescues. These bilateral bailouts are substantial in size and a central component of international cooperation during financial crises. We analyze the political economy of bilateral bailouts and study the trade-offs that potential creditor governments experience when other countries find themselves in financial distress. Creditor governments want to stabilize crisis countries by providing additional liquidity, particularly if the crisis country is economically or politically important to them, but they are constrained by domestic politics. Politicians aim to balance these countervailing pressures. They provide bailouts when their own economy is exposed to negative spillover effects and when the crisis country is important for geostrategic, military, or political reasons. Domestic economic and political constraints, on the other hand, limit their ability to bail out other countries. We test our hypotheses using an original data set on bilateral bailouts by the G7 countries to countries that experienced financial crises between 1975 and 2010. The findings of our statistical analysis support our theoretical argument and contribute to a deeper understanding of international cooperation's complex structure during financial crises.

9. The Political Economy of Global Financial Crises

2016 ◽  
Author(s):  
Louis W. Pauly
Keyword(s):  
Political Economy ◽  
Financial Crises ◽  
Emerging Market ◽  
The United States ◽  
The Political ◽  
Economic Downturn ◽  
Crisis Prevention ◽  
Governance Challenges ◽  
Late Twentieth ◽  
The One

This chapter examines the political economy of global financial crises. The current world economy reflects an experiment involving the opening and integration of financial markets on the one hand, and the dispersion of political authority on the other hand, The resulting governance challenges are evident in the circumstances surrounding financial crises spilling ever more readily across national borders. In the late twentieth century, most such crises began in emerging-market countries. In 2008, however, the experiment almost failed catastrophically when policy mistakes in the United States combined with an economic downturn to spawn a global emergency. This chapter considers the changing political economy of systemic risk assessment, crisis prevention, and emergency management as the experiment continues. The timeline for the financial crisis of 2008 is presented.

12. Politics and Markets

2020 ◽  
pp. 249-270
Author(s):  
Neil Robinson ◽  
Owen Worth
Keyword(s):  
Political Economy ◽  
World War Ii ◽  
Financial Crises ◽  
State Level ◽  
Initial Response ◽  
The Political ◽  
World War ◽  
Economic Management ◽  
Capitalist Development ◽  
International Financial Crisis

The political economy of Europe has changed significantly in the last four decades because of globalization, the collapse of communism, and financial crises. This chapter first discusses the different varieties of capitalism that emerged in Europe after World War II. It looks at how they have been put under pressure by economic internationalization and the dominance of neoliberal ideas, which together have weakened economic management at nation-state level. The chapter also looks at the development of capitalism in Eastern Europe and explanations for variance in post-communist capitalist development. Finally, the chapter considers the challenges to the management of Europe’s political economy posed by the international financial crisis that dominated much of Europe’s politics after 2007, along with the initial response to the economic crisis caused by the coronavirus pandemic in 2020.

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