On the Safe-Haven Ability of Bitcoin, Gold, and Commodities for International Stock Markets: Evidence from Spillover Index Analysis

Stock market is susceptible to various external shocks for its tight dependence on economic fundamentals, financial speculation, and fragile emotions in massive traders, making it a very risky market for investors. In this paper, we aim to identify whether commonly recognized safe-haven assets, that is, bitcoin, gold, and commodities, can provide investors with effective hedging utility in international stock markets, especially during periods of extreme market turbulence. By using the spillover index method based on the TVP-VAR model, we find that firstly, bitcoin, gold, and commodities can only offer weak hedging effects on stock markets. Furthermore, their abilities to act as a safe haven are ranked as: commodities > gold > bitcoin. Secondly, in general, we have observed the increasing hedging ability of these safe-haven assets in times of extreme market turmoil. Thirdly, among international stock and safe-haven asset markets, the world and the developed stock markets act as the net spillover transmitters, while bitcoin, gold, and commodities are the net recipients. Lastly, the total spillover effects are time-varying and increase significantly after the outbreak of extreme events.

Prediction and caution after COVID-19 crisis: The ecological and epidemiological risks of financial speculation

Since the COVID-19 pandemic spread worldwide, optimistic ecological and economic analyses have arisen. On one hand, the lockdowns that have taken place are pointed out as a means of reducing gas emissions, environmental exploitation, and consequently, factors that reduce the risk of zoonoses. On the other hand, macroeconomic policies that support state intervention in the economy and social benefits are seen as a signal for a more social and eco-friendly organized capitalism. The objective of our article is to call for caution on these predictions, indicating a post-pandemic countertrend according to which the relationship between economy and environment might be even more unstable and conflictual after the pandemic. Here, we discuss the relevance of Karl Marx’s fictitious capital concept as a fundamental key to thinking about financial market pressures on the environment. Hereby, we aim to raise the concern that the financial policies adopted in the course of the crisis have encouraged speculative instruments that lead to the overaccumulation of fictitious capital. This, in turn, requires the increased exploitation and expropriation of the environment in order to realize the overaccumulated rights and claims on future surplus value. Thus, we argue that the risk of environmental destruction will not be reduced as claimed by optimistic assumptions, but on the contrary will increase in the next few years. Such a risk does not dismiss, but rather suggests that new zoonoses may also arise.

The social lives of network effects: Speculation and risk in Jakarta's platform economy

Under the designation “platform urbanism,” there is growing scholarly recognition that platform intermediaries are reconfiguring urban industries, processes, and relationships through the collection and manipulation of big data. Central to realizing this economic project is financial speculation on platforms’ ability to coordinate network effects—a phenomenon in which the more users there are in a networked system, the more valuable and useful it becomes. In this paper, I argue that while the existing literature recognizes the importance of network effects, it has also adopted a limited conceptualization that understands platform firms as the primary agents generating and capturing the economic benefits of network effects. Drawing on 12 months of ethnographic fieldwork in Greater Jakarta, Indonesia, I work to expand this understanding through attention to the social lives of network effects—the ways in which platform architectures are always embedded in social relations created and sustained in everyday urban life. I show how ride-hailing drivers have attempted to mitigate the risks of their work through building socio-technical networks of their own, for their own purposes. Doing so reveals that it is not only platform firms and venture capital that speculate on network effects; rather, a range of actors in the city-region seek to tap into driver networks to advance their own social, political, and economic ends. In conclusion, I suggest that attending to these practices opens up space to reframe platform urbanism beyond its current preoccupation with macro political economic analyses, while also establishing new lines of inquiry for “speculative urbanism.”

Credit Guidance for a Desired Economy: An Original Institutional Economics Critique of Financialization

Financialization describes the turn to speculative asset trading that has become increasingly central to economic life in recent decades. Critics argue this has occurred at the expense of the “real economy,” referring to production and trade. Critics further argue that finance’s normal role is to serve the needs of the productive sector. Financialization, which diverts capital from production to speculation, is viewed as a deviant form of capitalist development. Drawing on original institutionalist insights, this article argues that such a juxtaposition of the so-called real economy versus deviant financialization is misleading. Financial speculation is a logical outcome of capitalism’s actual real economy—capital accumulation. Firms within a capitalist economy must continually engage profit-seeking practices, which in turn produces psychological habituation in agents. The latter makes profit-seeking, not production-seeking, the psychological foundation of capitalist agency, such that all legal profit-making activity is an instance of capitalism’s real economy. Prioritizing productive investment is a desired economy, an outcome that requires regulatory intervention. This paper proposes that credit guidance is a regulatory solution to financialization, one that can increase economic welfare. JEL Classification: O38, D91, H11, P10

Suspension 2.0: Segregated Development, Financial Speculation, and Waiting among Resettled Peasants in Urban China

Since the late 2000s, many rural-to-urban migrants in China have lost their rural land to development plans, resettled in designated areas, and acquired formal urban residency. They stopped migrating, and have apparently ended their life of "suspension," namely protracted mobility. While most existing research literature on this population foregrounds the issue of land dispossession, this article argues that, following resettlement, these former migrants' lives can be more accurately characterized as a state of suspension instead of dispossession. Many resettled young adults, while having secured livelihood thanks to state compensation, are excluded from the technology- and capital-intensive developments to which they have lost their land. Some of these young people instead became petty speculators and rentier capitalists by liquidating their compensated assets through mortgages, private lending, rent, and other financial means. They are constantly waiting for the next investment opportunity and windfall gain. Although physically settled down and economically secure, they remain anxious and unsettled. They continue to orient their lives towards an elusive future rather than striving to transform the here and now, thus living in a state that I call "suspension 2.0."

The Macroeconomics of Financial Speculation

I review the literature on financial speculation driven by belief disagreements from a macroeconomics perspective. To highlight unifying themes, I develop a stylized macroeconomic model that embeds several mechanisms. With short-selling constraints, speculation can generate overvaluation and speculative bubbles. Leverage can substantially inflate speculative bubbles, and leverage limits depend on perceived downside risks. Shifts in beliefs about downside tail scenarios can explain the emergence and the collapse of leveraged speculative bubbles. Speculative bubbles are related to rational bubbles, but they match better the empirical evidence on the predictability of asset returns. Even without short-selling constraints, speculation induces procyclical asset valuation. When speculation affects the price of aggregate assets, it also influences macroeconomic outcomes such as aggregate consumption, investment, and output. Speculation in the boom years reduces asset prices, aggregate demand, and output in the subsequent recession. Macroprudential policies that restrict speculation in the boom can improve macroeconomic stability and social welfare. Expected final online publication date for the Annual Review of Economics, Volume 13 is August 2021. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

At What Cost

Every day people decide what to eat, how to educate their children, where to find health care, and how to connect to others. For many, freely choosing a lifestyle defines the American dream. But in the 21st century, these choices are increasingly constructed by corporations and designed not to promote well-being, happiness, and planetary health, but to increase corporate profits and power. As a result, the decisions that corporations encourage individuals to make can lead to premature death, illness, or psychological distress as well as environmental pollution and social conflict. At What Cost: Modern Capitalism and the Future of Health maps the landscape of the changing role of capitalism in shaping health in America, documenting the human costs of the dominant political and economic system. It describes how globalization, financial speculation, monopoly concentration, and business control of science and technology have enhanced the ability of corporations and their allies to overwhelm influences of government, family, and community. It analyses how 21st-century capitalism structures the choices that affect the well-being of individuals, families, communities, and the planet. The book also explores how people, governments, civil society, and social movements are challenging corporate domination and forging alternative paths to a healthier, more sustainable world. While other books have explored pieces of this story, At What Cost offers a comprehensive analysis of the health consequences of modern capitalism. It provides citizens, parents, activists, scholars, and policy makers with the evidence they need to construct a better world for current and future generations.

Financial Speculation or Capital Investment? Evidence From Relationship Between Corporate Financialization and Green Technology Innovation

In this paper, 3,493 non-financial listed companies in China from 2007 to 2018 are selected as samples to study the impact of corporate financialization on green technology innovation through the panel regression model as well as the mediating effect model, so as to identify whether enterprises tend to financial speculation or capital investment. The main conclusions are as follows. First, corporate financialization has a speculative tendency instead of strategic capital investment. Second, corporate financialization shows heterogeneous impact on green technology innovation, which is dominated by capital expenditure. Third, the heterogeneity is reflected in two aspects: attribute characteristics and external environment. The attribute characteristics of the enterprise includes whether the industry belongs to pollution industry and the ownership structure. The external environment includes the location of enterprise and the degree of financing constraints. Fourth, there are significant differences between attribute characteristics and external environment of enterprises in the impact of financialization decision-making behavior. The deviation caused by enterprise attributes is less than 10%, but the deviation caused by external environment is close to 80%.