Globalization of capital, erosion of economic policy sovereignty, and the lessons from John Maynard Keynes

2021 ◽  
Vol 9 (4) ◽  
pp. 512-520
Author(s):  
Biagio Bossone
Keyword(s):  
Financial Markets ◽  
International Markets ◽  
Macroeconomic Policies ◽  
John Maynard Keynes ◽  
Policy Modeling ◽  
Global Context ◽  
Key Policy ◽  
Global Investors ◽  
National Governments ◽  
Globalized World

This article observes that current macroeconomic policy modeling, centered on domestic agents or agencies, fails to recognize the role that global investors play in determining the space for effective domestic macroeconomic policies, and argues that these actors must be brought to the center of macro analysis if one wants to understand how policies work in the global financial context. The article describes the key features of global investors, discusses their power to determine the prices at which public-sector liabilities (money and debt) trade in the international markets, and considers how this power affects the effectiveness of macroeconomic policies by national governments. As a result, no government is truly sovereign in a globalized world, and every government is subject to an intertemporal budget constraint (IBC), although, of course, not all governments are born equal and not all IBCs are equally binding: government IBCs are elastic, endogenous to global investor decisions, and yet ineluctable. The article concludes that choosing the correct country policy stance in today's financial global context would benefit from revisiting some of the key policy lessons that John Maynard Keynes left with us, considering his deep knowledge of global financial markets and how they affect country economies.

Statement by the Managing Director to the International Monetary and Financial Committee on the Global Economy and Financial Markets

Policy Papers ◽  
2010 ◽  
Vol 2010 (58) ◽  
Author(s):  
Keyword(s):  
Financial Markets ◽  
Emerging Economies ◽  
Global Economy ◽  
Developing Economies ◽  
Social Consequences ◽  
Smooth Transition ◽  
Macroeconomic Policies ◽  
Advanced Economies ◽  
Key Policy ◽  
Policy Challenge

The recovery remains fragile and uneven. In many advanced economies, activity is still sluggish and unemployment high, while legacy problems in the financial system remain unresolved. Activity is more robust in many emerging and developing economies. However, their prospects also depend on a healthy, broad-based recovery among the advanced economies, owing to deep real and financial linkages. The key policy challenge is to effect a smooth transition from public- to private-sector-led growth in many advanced economies, and from external to domestically driven growth in key emerging economies. While short-term macroeconomic policies are broadly appropriate, completing the two rebalancing acts will require tackling the medium-term fiscal, financial, and structural challenges raised by the crisis. Without such reforms, growth could sputter, with grave economic and social consequences.

A Modern Kaleckian-Keynesian Framework for Economic Theory and Policy

2013 ◽  
pp. 309-325 ◽  
Author(s):  
Philip Arestis ◽  
Malcolm Sawyer
Keyword(s):  
Economic Theory ◽  
Monetary Policy ◽  
Fiscal Policy ◽  
Labor Markets ◽  
Macroeconomic Policy ◽  
Financial Policy ◽  
Policy Agenda ◽  
Macroeconomic Policies ◽  
John Maynard Keynes ◽  
Main Instrument

Macroeconomic policies come from the “vision” of the ways in which an economy works. A “vision” of the economy where unemployment is a frequent occurrence gives rise to quite different policies from a “vision” of the economy in which there is little room for unemployment of labor, as, for example, in the New Classical macroeconomics. The macroeconomic vision that underlies the policy agenda of this chapter is described as Kaleckian-Keynesian, as it draws on the works and ideas of Michal Kalecki and John Maynard Keynes and others that approach the matter in a similar fashion. This chapter explores a modern Kaleckian-Keynesian framework for economic theory and policy. It first discusses fiscal policy, the main instrument of macroeconomic policy, before turning to monetary policy as well as financial policy, inflation, and policies that relate to product markets and labor markets.

scholarly journals MONEY, MARKETS AND MEN

2017 ◽  
pp. 329-348
Keyword(s):  
Financial Markets ◽  
Interest Rates ◽  
Payment Systems ◽  
Macroeconomic Policies ◽  
Monetary Policies ◽  
Money Markets ◽  
Financial Deregulation ◽  
The First World War ◽  
Uniform Result ◽  
First World

According to a common recurring analysis approach, most studies have defined the present external and universal internal deficit crisis, as the result of a wrong financial deregulation appearing in most modern financial markets. Speculation pressures, relaxing policies, monitoring over banks capital and bank governance models, seem as paying a widespread role as well. On the contrary, some historical and present new behavioral viewpoints show a uniform result of new general widespread monetary mismanagement attitudes, in a global new monetary perspective. Both Western financial markets and the new European single currency creation are showing same surfacing effects, which are generally large internal national deficits, huge trade imbalances and growing unemployment rates. The general market collapses that occurred up to the last 2008 unexpected monetary disintegration, considered firstly as the logical final effect of deep systematic crisis, as never before interlinked during the the twentieth century, has brought to a confused and contradictory row of financial irrecoverable shocks. Stemming from the monetary dissolution materialized during the First World War and never recovered, but for the short Bretton Woods interlude, the international and most of national payment systems are nowadays in a liquidity, interest rates and severe taxation single trap. My firm belief is that what happened at the end of the last century is not the consequence of some specific well-defined deregulation or mismanagement of financial institutions and markets, neither a structural collapse of some previous deteriorated model, or a cyclical evolving of market tendencies. On the contrary, what surfaced from September 1987 to August 2008 and after, has been as well unfolding up to now as an unavoidable effect of the single monetary secular debasement and unproductive and inefficient macroeconomic policies and the disregard of minor welfare and micro-economic frontiers and boundaries inconsistent in a fast enlarging competitive world. In 2016, the 1987-2008 global financial bubbles, from peripheral defaults or market plunges, has become the “final euro crisis." As well, the 19 countries of the EMS, issuing the single euro currency, apart from symptoms of economic stagnation and useless recurring monetary policies, acknowledged internal and external huge rigid trade unbalances. Some countries have been sliding into deficits for years, while the governing powers of the Eurozone have intervened from emergency to emergency, most deeply in Greece. In the Euro contest, Nobel Prize-winning economist Joseph E. Stiglitz (Stiglitz, 2016) has been dismantling the first hour prevailing consensus around, which affected Europe, demolishing the stronghold of austerity, and has been offering a series of discussible plans that could rescue the continent and the related parties from further depression.

Work and Workers in International Markets

2021 ◽  
Author(s):  
John S. Ahlquist
Keyword(s):  
International Political Economy ◽  
International Markets ◽  
Labor Standards ◽  
Economic Determinants ◽  
Policy Relevance ◽  
Political Orientations ◽  
Supply Chain Governance ◽  
And Migration ◽  
Definition Of ◽  
Globalized World

Four “problems” drive the International Political Economy (IPE) literature on work and workers in a globalized world: the economic determinants of workers’ political orientations; the role and future of labor unions; the regulation and governance of international supply chains; and migration. There remain walled gardens in the IPE literature on labor that inhibit productive exchange but the literature on supply chain governance and labor standards stands out for its policy relevance and active collaboration among scholars from different IPE traditions. The chapter concludes with reflections on how the implicit definition of “problems,” as opposed to explicit normative claims might not be “first best.”

The Internet and Governance in a Global Context

2005 ◽  
Vol 25 (1) ◽  
pp. 1-3 ◽  
Author(s):  
RICHARD ROSE
Keyword(s):  
United States ◽  
The United States ◽  
The Internet ◽  
Global Context ◽  
Economic Context ◽  
Internet Users ◽  
Use Of The Internet ◽  
National Governments ◽  
Industrial Societies ◽  
India And China

The Internet is a global phenomenon, but the way in which national governments respond to it varies with the political, social and economic context of a country. However, much that is written about the Internet and governance concentrates on a few advanced industrial societies, and especially the United States. Yet the federal and fragmented system of governance in the United States creates obstacles to the use of the Internet, while smaller countries from Estonia to Singapore produce innovations in e-governance. Moreover, even though the United States has more Internet users than any other country today, the growth points in the use of the Internet in the next few years will occur in radically different places, ranging from Russia and Brazil to India and China.

Minimization of Trigger Error in Cat-in-a-Box Parametric Earthquake Catastrophe Bonds with an Application to Costa Rica

2010 ◽  
Vol 26 (4) ◽  
pp. 983-998 ◽  
Author(s):  
Guillermo Franco
Keyword(s):  
Costa Rica ◽  
Moral Hazard ◽  
Financial Markets ◽  
Third Parties ◽  
Sensitivity Analyses ◽  
General Application ◽  
Catastrophe Bonds ◽  
Catastrophic Risks ◽  
National Governments

Catastrophe bonds are used by the insurance and reinsurance industry and by national governments to cede catastrophic risks to the financial markets. Triggers whose outcomes depend only on the earthquake parameter data published by respected third parties can be implemented to determine without moral hazard whether the bond principal is paid for a certain event. Sensitivity analyses to different design assumptions show that these transactions are often affected by trigger error, unless a sufficiently dense geographic discretization is selected to define the trigger zones. A process of general application to any geography is developed to minimize the trigger error. The methodology is illustrated with the design of a hypothetical cat bond for Costa Rica.

scholarly journals The Phenomenon of Related Dynamics in Global Finances (Russia, Brazil)

2018 ◽  
Vol 11 (1) ◽  
pp. 155-169 ◽  
Author(s):  
Yakov M. Mirkin ◽  
Karina M. Lebedeva
Keyword(s):  
Financial Markets ◽  
Stock Prices ◽  
Real Exchange Rates ◽  
Oil Prices ◽  
Statistical Modelling ◽  
Secondary Importance ◽  
Cause And Effect ◽  
The Us ◽  
Global Investors

The article establishes stable codependencies between international financial markets and their underlying cause and effect mechanisms, as an object of a global transformation. We demonstrate an intense co-integration between the financial markets of Russia, Brazil and the other emerging markets of Latin America (through the lens of stock markets and national currencies). The cause and effect mechanisms of this dependency are examined. We characterize the countries as analogous substitutes for investors (abundant similarities include: models of collective behaviour, ideology, model and structure of the economy, model of the financial sector, highly speculative markets in shares and currencies). The article explains an extremely limited role of the internal (primarily retail) investors in determining dynamics of the financial market. The central role of non-resident actors (global financial institutions and institutional investors) in the dynamics of the markets of Russian and Brazil is established. We demonstrate that for Russia and Brazil sources of foreign portfolio investments coincide. This includes Anglo-Saxon centers, specifically the US and British offshore jurisdictions, and the global centers of secondary importance (the Netherlands and Luxembourg). The decision making models of global investors in Russian and Brazil are examined: stock prices are driven by the oil prices, and in part by the US stock market, and rouble and real exchange rates follows oil prices and the EUR-USD currency pair. Analysis and conclusions made in the article are supported by a significant volume of statistical modelling. 

scholarly journals The Jurisprudence of Human Rights in a Global Context

2021 ◽  
Vol 8 (04) ◽  
pp. 6441-6453
Author(s):  
Dr. Matthew Enya Nwocha ◽  
Steve Ahamefula Amaramiro ◽  
Emmanuel Chinweike Ibezim
Keyword(s):  
Human Rights ◽  
Global Context ◽  
The Status ◽  
Different Dimensions ◽  
United Nations System ◽  
Jus Cogens ◽  
Domestic Affairs ◽  
International Instruments ◽  
National Governments ◽  
Nations System

This paper is a study of the conceptual dimensions of human rights gleaned from the writings of scholars and jurists, judicial precedent, and domestic and international human rights instruments, particularly under the United Nations System. Human rights have become an international subject and have today attained the status of a jus cogens rule of international law. The need to determine and clarify the history and dynamics of this subject has given impetus and inspiration to this paper. Applying a theoretical and doctrinal methodology, the paper set out to appraise the different dimensions, and for that matter ramifications, to the concept of human rights and how they affect our everyday life. The paper found, among other things, that human rights law and its observance are much more entrenched at the international forum than in domestic jurisdictions. The paper concluded that human rights issues are no longer a matter of domestic affairs of any nation in the light of extant international instruments to which nations are committed. It therefore recommended that national governments should be more sensitive and responsive to the growing status of human rights as an international subject.

scholarly journals Comparing Monetary And Fiscal Policy Transmission Across The Americas And The Emu-Area

2011 ◽  
Vol 7 (8) ◽  
Author(s):  
Dimitrios Tsoukalas
Keyword(s):  
Fiscal Policy ◽  
Financial Markets ◽  
Structural Var ◽  
Transmission Mechanism ◽  
Var Models ◽  
Macroeconomic Policies ◽  
Policy Transmission ◽  
Policy Shocks ◽  
Monetary And Fiscal Policy ◽  
The U.S

This paper estimates structural VAR models to compare the transmission mechanism of monetary and fiscal policy in the Americas and the EMUarea countries. First, the NAFTA countries are considered and the estimation results are compared with those for the EMU-area countries. Attention is also paid to interaction of macroeconomic policies and the effects of shocks in financial markets. Results show that the Americas except for the U.S. and Canada react rather differently to monetary and fiscal policy shocks than the EMU- area countries.

The European Union’s Industrial Policy

2020 ◽  
pp. 620-660 ◽  
Author(s):  
Michael A. Landesmann ◽  
Roman Stöllinger
Keyword(s):  
European Union ◽  
Industrial Policy ◽  
Environmental Sustainability ◽  
The European Union ◽  
Global Context ◽  
Structural Funds ◽  
Catching Up ◽  
Advanced Economies ◽  
The Subject ◽  
National Governments

This chapter reviews the industrial policy in the European Union in the light of the revived interest in the subject and the most pressing challenges ahead. In the current global context these challenges are (i) to keep pace at the technology frontier with the technologically most advanced economies; (ii) to meet the challenges of fast catching-up emerging economies; (iii) to contribute to the convergence and cohesion processes within the European Union; and (iv) to deal with climate change and environmental sustainability issues more generally. A quantitative exercise that makes use of the European Union’s budget data, including the structural funds, and member states aid expenditures, is used to identify the European Union’s current industrial policy priorities. The results are the basis for an assessment of the extent to which the key challenges are addressed at the supranational level and which aspects are primarily dealt with by national governments.

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