From UNCTAD - 19 March 2009
The Global Economic Crisis. Sistemic Failures and Multilateral Remedies
" - Market fundamentalist laissez-faire of the last 20 years has dramatically failed the
test. Financial deregulation created the build-up of huge risky positions whose
unwinding has pushed the global economy into a debt deflation that can only be
countered by government debt inflation:
– The most important task is to break the spiral of falling asset prices and falling
demand and to revive the financial sector’s ability to provide credit for productive
investment, to stimulate economic growth and to avoid deflation of prices. The key
objective of regulatory reform has to be the systematic weeding out of financial
sophistication with no social return..." see more here Key
messages
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Paul Krugman - Princeton University
Paper presented at the 14th Jacques Polak Annual Research Conference
Hosted by the International Monetary Fund
Washington, DC─November 7–8, 2013
Currency Regimes, Capital Flows, and Crises
..."My answer is that claims about the vulnerability of floating-rate debtors to crisis haven’t been given
any specificity because they do not, in fact, make sense. Simple macroeconomic models suggest that a
loss of confidence in a country like the United States, taking place at a time when interest rates are at
the zero lower bound, should, if anything, have an expansionary effect. Nor can one appeal to the
lessons of history: cases resembling the hypothesized crisis scenario are rare, and those that exist don’t
support the notion that Greek-style crises can take place under a very different currency regime.
You may find it implausible that conventional wisdom, backed by so many influential people, could be
wrong on so basic a point. But it’s not the first time that has happened, and it surely won’t be the last"...
Roberto Alvarez and José De Gregorio
Universidad de Chile - October 2013
Why did Latin America and Developing Countries Perform Better in the
Global Financial Crisis than in the Asian Crisis?
The response of Latin American economies to the Global Financial Crisis
was unprecedented. In the past, when the world got the flu, Latin
America got pneumonia. Such was the case with the East Asian financial
crisis, but this time was different. Emerging market economies were able
to successfully weather the worst financial crisis since the Great
Depression. This paper looks at which factors explain better
performance. Was it good luck? Was it good policies? In this article,
economic growth during the global financial crisis is compared with
growth during the Asian crisis. We look at the experience of Latin
America and present econometric evidence for a large sample of
countries, with special focus on emerging and developing economies. We
find that exchange rate flexibility and a looser monetary policy played
an important role in mitigating the crisis. We also find that higher
private credit growth and more financial openness reduced growth.
There is some evidence of good luck, but only within the sample of thirty
one emerging markets. Better macroeconomic management during the
recent crisis was key to the unprecedented economic performance.
Carlos A. Vegh -
Johns Hopkins University and NBER
Guillermo Vuletin -
Brookings Institution
October 21, 2013
The road to redemption: Policy response to
crises in Latin America
This paper analyzes the …fiscal and monetary policy responses to crises in
Latin America over the last 40 years. We argue that, on average, Latin American
countries have graduatedin terms of their policy reponses in the sense that they
have been able to switch from procyclical to counteryclical policy responses
(with Brazil and Chile being prime examples). We further argue that such
countercyclical policy response has been efective in reducing the duration and
intensity of crises. Finally, we relate our analysis to the current crisis in
the Eurozone and argue that it shares some of the features of the oldLatin
America; in particular, procyclical …fiscal and monetary policy responses to
crises in Latin America over the
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From International Labour Organization
Global Wage Report 2012/13
Wages and equitable growth
Between 1999 and 2011 average labour
productivity in developed economies increased more than twice as much
as average wages. In the United States, real hourly labour productivity
in the non-farm business sector increased by about 85 per cent since
1980, while real hourly compensation increased by only around 35 per
cent. In Germany, labour productivity surged by almost a quarter over
the past two decades while real monthly wages remained flat.
The global trend has resulted in a change in the distribution of
national income, with the workers’ share decreasing while capital
income shares increase in a majority of countries.
Even in China, a country where wages roughly tripled over the last
decade, GDP increased at a faster rate than the total wage bill – and
hence the labour share went down.
The drop in the labour share is due to technological progress, trade
globalization, the expansion of financial markets, and decreasing union
density, which have eroded the bargaining power of labour. Financial
globalization, in particular, may have played a bigger role than
previously thought.
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From Project Syndicate
Sep 14, 2012
Cripped Capitalism - 9 opinions
"Four years after the collapse of Lehman Brothers, the global economy remains mired in low growth and high unemployment.
As the income gap between top earners – including bankers, brokers, and corporate leaders – and the middle class
widens, many are beginning to question whether modern capitalism is sustainable, or even desirable."
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From the New Left Review
NLR 71 Sept. Oct. 2011
The crises of democratic capitalism
Wolfgang Streeck
The collapse of the American
financial system that occurred in 2008 has since turned into an
economic and political crisis of global dimensions. How should this
world-shaking event be conceptualized? Mainstream economics has tended
to conceive society as governed by a general tendency toward
equilibrium, where crises and change are no more than temporary
deviations from the steady state of a normally well-integrated system.
A sociologist, however, is under no such compunction.
Rather than construe our present affliction as a one-off disturbance to
a fundamental condition of stability, I will consider the ‘Great
Recession’ and the subsequent near-collapse of public finances as a
manifestation of a basic underlying tension in the political-economic
configuration of advanced-capitalist societies; a tension which makes
disequilibrium and instability the rule rather than the exception, and
which has found expression in a historical succession of disturbances
within the socio-economic order. More specifically, I will argue that
the present crisis can only be fully understood in terms of the
ongoing, inherently conflictual transformation of the social formation
we call ‘democratic capitalism’.
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P. Krugman,
Presidential Addres, Woodrow Wilson School, Princeton University, USA.
In Eastern Economic Journal (2011)
37, 307–312
The profesion and the
crisis
“…the biggest problem we had as a
profession wasn’t
failure to keep up with a changing world, it was failure to remember
what our
fathers learned.
“…What we really need is a change in the destructive
social dynamics that brought us to this point. And I wish I knew how to
do
that.
“…But my problem is obvious: I’m an economist, and it
seems that we need some kind of sociologist to solve our profession’s
problems..”
“…we would have responded better to this crisis if
macroeconomics had been frozen at the level of knowledge it had in
1948, when
Paul Samuelson published the first edition of his famous textbook.
“…And the result has been to leave actual policy
discussion without any discipline from the people who should be shaping
that
discussion: politicians and officials have been free to follow their
prejudices
and intuitions, never mind the lessons of history and analysis.
"Economists have failed to fulfill their social function..."
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How Did Economists Get It So
Wrong?
By Paul
Krugman
The New York Times: Published: September 2, 2009
It’s hard to believe now, but not long
ago economists were congratulating themselves over the success of their
field. Those successes — or so they believed — were both theoretical
and practical, leading to a golden era for the profession. On the
theoretical side, they thought that they had resolved their internal
disputes. Thus, in a 2008 paper titled “The State of Macro” (that is,
macroeconomics, the study of big-picture issues like recessions),
Olivier Blanchard of M.I.T.,
now the chief economist at the International
Monetary Fund, declared that “the state of macro is good.” The
battles of yesteryear, he said, were over, and there had been a “broad
convergence of vision.” And in the real world, economists believed they
had things under control: the “central problem of depression-prevention
has been solved,” declared Robert Lucas of the University
of Chicago in his 2003 presidential address to the American
Economic Association. In 2004, Ben
Bernanke, a former Princeton professor who is now the chairman of
the Federal
Reserve Board, celebrated the Great Moderation in economic
performance over the previous two decades, which he attributed in part
to improved economic policy making.
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From
U.S.
Bureau of Labour Statistics - October 2009
The employment situation
- September 2009
Since the start of the recession in
December 2007, the number of unemployment persons has increased by 7.6
millions to 15.1 million, and the unemployment rate has doubled to 9.8
percent. In December 2007 the number of unemployed persons was 7.5
million.
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The Revenge of the Market on the Rentiers
Why neo-liberal reports of the end of
history turned out to be premature
José Gabriel Palma - Faculty of Economics - Cambridge University - June
2009
Abstract:
Starting from the perspective of heterodox
Keynesian-Minskyian-Kindlebergian financial
economics, this paper begins by highlighting a number of mechanisms
that contributed
to the current financial crisis. These include excess liquidity, income
polarisation,
conflicts between financial and productive capital, lack of intelligent
regulation,
asymmetric information, principal-agent dilemmas and bounded
rationalities. However,
the paper then proceeds to argue that perhaps more than ever the
‘macroeconomics’
that led to this crisis only makes analytical sense if examined within
the framework
the political settlements and distributional outcomes in which it had
operated. Taking
the perspective of critical social theories the paper concludes that,
ultimately, the
current financial crisis is the outcome of something much more
systemic, namely an
attempt to use neo-liberalism (or, in US terms, neo-conservatism) as a
new technology
of power to help transform capitalism into a rentiers’ delight. And in
particular, into
system without much ‘compulsion’ on big business; i.e., one that
imposes only minimal
pressures on big agents to engage in competitive struggles in the real
economy (while
inflicting exactly the opposite fate on workers and small firms). A key
component
effectiveness of this new technology of power was its ability to
transform the state
major facilitator of the ever-increasing rent-seeking practices of
oligopolistic capital.
architects of this experiment include some capitalist groups (in
particular rentiers from
the financial sector as well as capitalists from the ‘mature’ and most
polluting industries
of the preceding techno-economic paradigm), some political groups, as
well as
intellectual networks with their allies – including most economists and
the ‘new’ left.
Although rentiers did succeed in their attempt to get rid of
practically all fetters on
greed, in the end the crisis materialised when ‘markets’ took their
inevitable revenge
the rentiers by calling their (blatant) bluff.
Wolpe Lecture – 10 September 2009
Global Financial Crisis – Toxic Assets, Toxic
Ideology
José Gabriel Palma
Economic theory has missed the crisis
and cannot explain and understand what is going on. In one of
the sections of the paper that accompany this talk, it deals with this
problem in economic theory,
but that part need only be read by economists, since it is only they
who have to be convinced that
the discipline of economics is useless.
What components of economics can assist us in understanding the current
crisis? The Keynesian
tradition is the only one that is helpful at this moment in time. Paul
Krugman had a long article in the
New York Times, which is a detailed self-criticism of his own
macro-economic theory and provides
the economic community with an opportunity to reflect on past
theoretical mistakes (New York
Times on 6 September 2009)( See above, P. Krugman, "How did economists
get
it so wrong?". Note by Róbinson Rojas).
To understand this crisis, we have to look at the political settlement
and the distribution in which it
operates – this is a crisis of the political economy not an economic
crisis focusing on interest rates,
the role of central banks or inflation targeting. Even further, it is a
neoliberal crisis, the ideology that
gained power since 1979 and which was rigorously pursued by US
President Regan and UK Prime
Minister Thatcher. It concerns how the global capitalist elite tried to
form capitalism into a rentier’s
paradise and how the capitalist elite tried to use the state to further
this process. How could
1 Note – all graphs were taken from the paper which accompanied Palma’s
lecture entitled ‘Revenge of the
Market on the Rentiers’.
DESA Working Paper No. 35
ST/ESA/2006/DWP/35 - September 2006
Globalizing Inequality: ‘Centrifugal’
and ‘Centripetal’ Forces at Work
José Gabriel Palma
This paper reassesses national income
inequalities in this era of globalization. Th e main conclusion
is that two opposite forces are at work: one ‘centrifugal’ at the two
extremes of the distribution—increasing
the disparity of income shares appropriated by the top and by the
bottom four deciles across
countries; and the other ‘centripetal’ in the middle—increasing the
uniformity of the share of income
going to deciles 5 to 9. Th erefore, globalization is creating a
situation where virtually all the intercountry
diversity of income distribution is the result of diff erences in what
the rich and the poor get
in each country.
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| UNU-WIDER - Discussion Paper No. 2009/03
The Global Economic
Crisis.
Towards Syndrome-Free Recovery for Africa
Augustin Fosu and Wim Naudé - June 2009
This paper outlines the impact of the
global economic crisis on Africa. Recovery
requires coordinated and consistent efforts to assist individual
countries in mitigating
(reducing) the risk, coping with the impact, and reducing risk over the
longer term. Care
should be exercised to maintain and improve good governance, which is
essential for
African countries to avoid introducing various ‘anti-growth policy
syndromes’ into their
economies. These could arise if responses to the crisis result in (i)
further boom-bust
cycles and flaming the historically high volatility of African growth,
including inflation,
(ii) another debt crisis, (iii) household engaging in adverse coping
strategies with lasting
impacts; (iv) reversal of gains made in opening up African economies
and
re-introducing crippling state controls; and (v) entrenchment of
inequities and
inefficiencies in the global financial and aid architecture.
Prepared by
the African Center for Gender and Social Development (ACGS) - 2009
African Perspectives of
the global economic and financial crisis,
including the impact on health
The global financial and economic
crisis is presenting significant economic and
social development challenges for African countries. The current
economic global
slowdown, which began with the collapse of the housing market in the
United
States, has deepened causing many developed countries to enter into a
recession.
The impacts on African economies and of the other developing world were
initially expected to be less severe, but they have now been estimated
to be
profound. Growth rates in African countries have plummeted, as the
crisis is
hitting the key drivers of growth, especially trade flows, capital
inflows, natural
resource sectors (oil and minerals) and agricultural exports. Household
incomes
are falling due to job losses and decreased remittances from family
members
working abroad. There are concerns that budget pressures in donor
countries will
reduce aid flows.
A report
from the Committee of African Finance Ministers and Central Bank
Governors
established to monitor the crisis.
March 21, 2009
Impact
of
the crisis on African economies - sustaining growth and poverty
reduction
African Perspectives and Recommendations to the G20
Executive Summary
Although most African countries are not on track to meet the Millennium
Development Goals,
Africa had made steady progress over the last decade, building the
foundations for higher growth
and poverty reduction. This more optimistic picture is now being
undermined by factors outside
its control. While the initial effects of the financial crisis were
slow to materialize in Africa, the
impact is now becoming clear. It is sweeping away firms, mines, jobs,
revenues, and livelihoods;
it is in short a full blown development crisis. For the first time in a
decade there will be zero
growth per capita. This note provides evidence of the effects, and
suggests action needed. For
Africa no less than elsewhere time is of essence; decisive remedial
action is needed now...
Global financial and economic crisis:
how vulnerable is Nigeria? -2009
The effects of global financial crisis on Nigerian
economy, by Abdul
Adamu2008
IOM
Policy Brief - January 2009
The
impact of
the global financial crisis on migration
The current global financial crisis is
expected to lead to a downturn in the global economy (and perhaps a
deeper recession). The depth and extent of the crisis is difficult to
predict and the impact of the crisis is likely to vary according to
country, geographic region and employment sector. During economic
downturns, however, migrant workers are often the first to lose their
jobs and while some may well choose to return home, policies aimed at
sending migrant workers home are not the solution and could have
potentially disastrous consequences for development, given the scale of
remittances – expected to reach USD 283 billion to developing countries
in 2008 – and the already high levels of unemployment in developing
countries.
Marx analysis of capitalism
Excerpt and condensation of Chapter 6 from The Worldly Philosophers:
The Lives, Times, and Ideas of the Great Economic Thinkers, by Robert L.
Heilbroner, 7th ed., 1999.
A
Comparison of Two Cycles in the World Economy: 1989-2007
In this paper Korkut Boratav attempts to compare and analyse some of the quantitative indicators of the
world economy during the 1989-2007 years. It will, hopefully, illuminate some aspects of the
paths of articulation of peripheral economies with the imperialist system during the past two
decades.
The world economy is analysed on the basis of the conventional division of the
imperialist system between the metropole and the periphery and their major sub-groups. The
focus will be on some of the linkages, predominantly those reflecting capital and resource
flows between the two poles of the system. Further in-depth analysis of national economies is
not the objective. However, some emphasis (limited to aggregated economic indicators) on
USA and on a group of large peripheral economies is undertaken.
Creative
Destruction and
Aggregate Productivity Growth
Productivity growth is the engine of economic
growth and is responsible for rising standards
of living. But all firms do not partake equally
in the nation’s productivity growth. Rather,
according to economist Joseph Schumpeter’s theory, firms
undergo a process of “creative destruction”: New firms
that adapt to new knowledge cause the decline and eventual
demise of incumbent firms. In this article, Shigeru
Fujita surveys recent studies that examine the role of
creative destruction in aggregate productivity growth.
Is
Schumpeterian "Creative Destruction" a Plausible Source of
Endogenous Real Business Cycle Shocks?
K. L. Phillips and J. Wrase - 2003
This paper looks at the linkages between growth and business cycles by bringing together two strands of
literature. We incorporate a quality ladders engine of growth into an otherwise standard real business cycle model.
Our fundamental question is, can Schumpeter’s creative destruction process which leads to technological
improvement over time also generate realistic business cycles? We use a standard real business cycle approach to
solve for rules of motion in our state variables and proceed to generate artificial time series. We compare the
statistical properties of these series with their historical counterparts to determine if the model mimics the real world
closely.
Assessing the impact of
the current financial and economic crisis on global FDI flows
-April 2009
Poverty
Impact of the Economic Slowdown
in Developing Asia: Some Scenarios
FACT SHEET:
Poverty Scenarios and the Crisis - IDB
Global Financial Crisis:
Impact on India’s Poor Some Initial Perspectives - UNDP
A global policy package to
address the global crisis -ILO - 2008
Global Employment Trends
Update, May 2009- ILO
The Financial and Economic Crisis:
A Decent Work Response -ILO 2009
Social and Labor Market Policies
for Tumultuous Times: Confronting the Global Crisis in Latin America and the Caribbean - IDB 2009
The region of Latin America and the Caribbean (LAC) is no stranger to aggregate
economic shocks triggered by financial crises. Although the region has confronted a
high frequency of economic crises, recoveries have tended to be rapid. The rebounds
from the 1994 crisis, in Mexico, the 1997 Asian crisis, the 1998–99 currency crisis in
Brazil, and the 2001 Argentine crisis to name a few, all occurred with a span of a year
or two. Notwithstanding the region’s experience with dramatic economic downturns,
the characteristics of the current global economic crisis may represent for LAC a test
which is unparalleled in recent decades. According to IMF estimates the year 2009 will
be the first year since the Second World War in which the world economy will contract
rather than grow. In 2009 alone, the estimated number of unemployed is projected to
reach 17 million, exceeding the estimate of unemployment in the US of 13.4 million.1
The crisis is already hitting LAC hard through various channels. Credit to governments,
firms and households shrank rapidly in the second half of 2008. With the US at the
epicenter of the crisis and the contagion spread to Europe and Japan, the collapse of
aggregate demand in LAC’s major trading partners signals a grave situation. Reflecting
this, prices for exports like oil, metals and basic grains have dropped. A dramatic fall
in net private financial flows and direct foreign investment is foreseen for 2009 with
remittances also declining.
Políticas sociales y laborales
para tiempos tumultuosos: Cómo enfrentar la crisis global en América Latina y el Caribe - BID 2009
Policy Trade-offs for
Unprecedented Times: Confronting the Global Crisis in Latin America and the Caribbean IDB 2009
After an Indian summer that lasted well over a year into the financial crisis that started
in the United States, by mid 2008, and especially after the collapse of Lehman Brothers,
the global crisis caught up with Latin America and the Caribbean, putting an end to
one of the most buoyant periods in its recent history. Since then, currencies have
depreciated sharply, stock prices have experienced severe falls, and growth forecasts
have been revised dramatically downward, with the region now expected to display
negative rates of growth in 2009.
However, something appears to be different this time. After all, although the region
was hit hard, it has so far withstood the crisis without major financial turbulences.
Generally speaking, the region has to date avoided currency and debt crises and bank
runs, so typical of previous episodes of global financial turbulence (1982, 1998, and
2001). The ability of the region to resist an extremely severe external shock without
major crises appears to suggest that it has now graduated from being exceptional and
has earned the “privilege of normality”.
Dilemas de política
económica en tiempos sin precedentes: Cómo enfrentar la crisis global en América Latina y el Caribe - BID 2009
UN:Conference on the World
Financial and Economic Crisis and Its Impact on Development
IMF:
Contractionary Forces Receding But Weak Recovery Ahead
CGAP.
Focus Note: The Global Financial Crisis and Its Impact on Microfinance
At
inaugural public symposium. "Voiceless" have strong words for global financial
crisis
Representatives of civil society, private sector tell UNCTAD
and officials of other agencies that global turmoil is taking a painful
toll
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From United Nations Conference on Trade and
Development - July 2009
The least developed countries report 2009
The state and development governance
The current economic crisis is the result of weaknesses in the
neoliberal thinking that has shaped global economic policies in the
last three decades; weaknesses that have been magnified by policy
failures and lax regulation in the advanced countries. The cost in
terms of the bailouts and recapitalization of banks has already reached
unprecedented levels. However, the adverse impact on the real economy
and the cost in terms of lost output and employment are now the great
concerns. Most advanced economies are in recession and emerging markets
have slowed. But the major victims of this contagion are likely to be
the least developed countries (LDCs), many of which are still suffering
the adverse impact of recent energy and food crises and have the least
capacity to cope with yet another major external shock.
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From UNCTAD - 19 March 2009
The Global Economic Crisis:
Systemic Failures and Multilateral Remedies
"Market fundamentalist laissez-faire of the last 20 years has
dramatically failed the test. Financial deregulation created the
build-up of huge risky positions whose unwinding has pushed the global
economy into a debt deflation that can only be countered by government
debt inflation:
– The most important task is to break the spiral of
falling asset prices and falling demand and to revive the financial
sector’s ability to provide credit for productive investment, to
stimulate economic growth and to avoid deflation of prices. The key
objective of regulatory reform has to be the systematic weeding out of
financial sophistication with no social return.
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China on the global financial
crisis 2008
Window of
China |
From China Digital Times
China 2008: The Global
Financial Crisis
This next article in the CDT series on important issues facing China in
2008 focuses on China’s role in the global financial crisis.
To give a deeper understanding of China’s up-and-coming role on the
world stage, CDT looks at articles, issues, and policies over the last
six months that contributed to the current state of the Chinese
economy. While this is not a comprehensive timeline, it will give a
basic analysis of China’s reaction to the financial crisis and its role
within it.
CDT is run by the Berkeley China Internet Project (BCIP) out of the Graduate School
of Journalism at the University of California, Berkeley.
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From Foreign Policy in Focus - 24 December 2008
The Coming Capitalist Consensus
By Walden Bello
Not surprisingly, the swift unraveling of the global economy combined
with the ascent to the U.S. presidency of an African-American liberal
has left millions anticipating that the world is on the threshold of a
new era. Some of President-elect Barack Obama’s new appointees – in
particular ex-Treasury Secretary Larry Summers to lead the National
Economic Council, New York Federal Reserve Board chief Tim Geithner to
head Treasury, and former Dallas Mayor Ron Kirk to serve as trade
representative – have certainly elicited some skepticism. But the sense
that the old neoliberal formulas are thoroughly discredited have
convinced many that the new Democratic leadership in the world’s
biggest economy will break with the market fundamentalist policies that
have reigned since the early 1980s.
One important question, of course, is how decisive and definitive the
break with neoliberalism will be. Other questions, however, go to the
heart of capitalism itself. Will government ownership, intervention,
and control be exercised simply to stabilize capitalism, after which
control will be given back to the corporate elites? Are we going to see
a second round of Keynesian capitalism, where the state and corporate
elites along with labor work out a partnership based on industrial
policy, growth, and high wages – though with a green dimension this
time around? Or will we witness the beginnings of fundamental shifts in
the ownership and control of the economy in a more popular direction?
There are limits to reform in the system of global capitalism, but at
no other time in the last half century have those limits seemed more
fluid.
President Nicolas Sarkozy of France has already staked out one
position. Declaring that “laissez-faire capitalism is dead,”
he has created a strategic investment fund of 20 billion euros to
promote technological innovation, keep advanced industries in French
hands, and save jobs. “The day we don’t build trains, airplanes,
automobiles, and ships, what will be left of the French economy?” he
recently asked
rhetorically. “Memories. I will not make France a simple tourist
reserve.” This kind of aggressive industrial policy aimed partly at
winning over the country’s traditional white working class can go
hand-in-hand with the exclusionary anti-immigrant policies with which
the French president has been associated.
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From The Guardian - 28 September 2008
A
shattering moment in America's fall from power
The global financial crisis will see the US falter in the same way the
Soviet Union did when the Berlin Wall came down. The era of American
dominance is over
By John Gray
Our gaze might be on the markets melting down, but the upheaval we are
experiencing is more than a financial crisis, however large. Here is a
historic geopolitical shift, in which the balance of power in the world
is being altered irrevocably. The era of American global leadership,
reaching back to the Second World War, is over.
You can see it in the way America's dominion has slipped away in its
own backyard, with Venezuelan President Hugo Chávez taunting and
ridiculing the superpower with impunity. Yet the setback of America's
standing at the global level is even more striking. With the
nationalisation of crucial parts of the financial system, the American
free-market creed has self-destructed while countries that retained
overall control of markets have been vindicated. In a change as
far-reaching in its implications as the fall of the Soviet Union, an
entire model of government and the economy has collapsed.
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World Income
Inequality Database (UNU)
A major update of the World Income Inequality Database is available as
of May, 2008. Please consult the revision notes for details.
The UNU-WIDER World Income Inequality Database (WIID) collects and
stores information on income inequality for developed, developing, and
transition countries. The database and its documentation are available
on this website.
WIID2 consists of a checked and corrected WIID1, a new update of the
Deininger & Squire database from the World Bank, new estimates from
the Luxembourg Income Study and Transmonee, and other new sources as
they have became available. WIID2a contains fewer points of data than
WIID1 as some overlaps between the old Deininger & Squire data and
estimates included by WIDER have been eliminated along with some low
quality estimates adding no information. In addition to the Gini
coefficient and quintile and decile shares, survey means and medians
along with the income shares of the richest 5% and the poorest 5% have
been included in the update. In addition to the Gini coefficient
reported by the source, a Gini coefficient calculated using a new
method developed by Tony Shorrocks and Guang Hua Wan is reported. The
method estimates the Gini coefficient from decile data almost as
accurately as if unit record data were used.
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Stand
and Deliver: Private Property and the
Politics of Global Dispossession
By Stefan
Andreasson - 2006
Queen’s University Belfast
Property rights necessarily generate violent,and oftentimes lethal,
processes of dispossession.While liberal
theorists from Locke to Hayek consider property rights as an essential
and emancipatory component of
human freedom, they fail to consider societal power asymmetries
impeding the ability of property rights
to protect the interests of the weak and marginalised. If property
rights produce freedom and prosperity,
they do so very selectively. More obvious is the ongoing historical
process of already propertied
classes making ‘clever usurpation into an irrevocable right’ by
extending private property regimes along
two key dimensions – type and space.
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From The Financial Times - London
The future of
capitalism
"The credit crunch has destroyed faith in the free market ideology that
has dominated Western economic thinking for a generation. But what can
– and should – replace it? Over the coming weeks we will conduct a
wide-ranging debate on this dominant political issue of the day. March
5 2009."
From The Third World Network
The Global Financial and
Economic Crisis 1997
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United Nations
World Economic Situation and Prospects, 2005 –
2009
On the Global Financial and Economic Crisis
The World Economic Situation and Prospects is the United Nations annual
report (with mid-year updates) on the state of the global economy. The
report has been published since 1948, originally as the World Economic
Report. All reports since then are available on line here and www.un.org/esa/policy/wess/past-issues.htm.
WESP is a joint publication of the Department of Economic and Social
Affairs (DESA), UNCTAD and the UN’s five regional commissions (ECLAC,
ECA, ECE, ESCAP, and ESCWA).
In recent years, from 2005, but also in earlier editions, WESP has
warned against the dangers of the unsustainable pattern of global
growth that emerged about a decade ago and which was characterized by
strong consumer demand in the United States, funded by easy credit and
booming house prices. Far-reaching financial deregulation facilitated a
massive and unfettered expansion of new financial instruments, such as
securitized sub-prime mortgage lending, sold on financial markets
worldwide. This pattern of growth enabled strong export growth and,
eventually, high commodity prices benefiting many developing countries,
but also led to mounting global financial imbalances and overleveraged
financial institutions, businesses and households. In the context of a
highly integrated global economy without adequate regulation and global
governance structures, the breakdown in one part of the system thus
easily leads to failure elsewhere, as we are witnessing today.
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UNCTAD on the financial and economic crisis
2008-2009
World Economic Situation and Prospects 2009
The world economy is mired in the worst financial crisis since the
Great Depression. What
first appeared as a sub-prime mortgage crack in the United States
housing market during
the summer of 2007 began widening during 2008 into deeper fissures
across the global
financial landscape and ended with the collapse of major banking
institutions, precipitous
falls on stock markets across the world and a credit freeze. These
financial shockwaves
have now triggered a full-fledged economic crisis, with most advanced
countries already
in recession and the outlook for emerging and other developing
economies deteriorating
rapidly, including those with a recent history of strong economic
performance.
In the baseline scenario of the United Nations forecast, world gross
product
is expected to slow to a meagre 1.0 per cent in 2009, a sharp
deceleration from the 2.5
per cent growth estimated for 2008 and well below the more robust
growth of previous
years. At the projected rate of global growth, world income per capita
will fall in 2009.
Output in developed countries is expected to decline by 0.5 per cent in
2009. Growth in
the economies in transition is expected to slow to 4.8 per cent in
2009, down 6.9 per cent
in 2008, while output growth in the developing countries would slow
from 5.9 per cent in
2008 to 4.6 per cent in 2009.
Given the great uncertainty prevailing today, however, a more
pessimistic scenario
is entirely possible. If the global credit squeeze is prolonged and
confidence in the
financial sector is not restored quickly, the developed countries would
enter into a deep
recession in 2009, with their combined gross domestic product (GDP)
falling by 1.5 per
cent; economic growth in developing countries would slow to 2.7 per
cent, dangerously
low in terms of their ability to sustain poverty reduction efforts and
maintain social and
political stability. In this pessimistic scenario, the size of the
global economy would actually
decline in 2009—an occurrence not witnessed since the 1930s.
To stave off the risk of a deep and global recession, World Economic
Situation
and Prospects (WESP) 2009 recommends the implementation of massive,
internationally
coordinated fiscal stimulus packages that are coherent and mutually
reinforcing and
aligned with sustainable development goals. These should be effected in
addition to the
liquidity and recapitalization measures already undertaken by countries
in response to the
economic crisis. Under a more optimistic scenario—factoring in an
effective fiscal stimulus
of between 1.5 and 2 per cent of GDP by the major economies, as well as
further interestrate
cuts—WESP forecasts that, in 2009, the developed economies could post a
0.2 per cent
rate of growth, and growth in the developing world would be slightly
over 5 per cent.
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From United Nations Development
Programme (UNDP)
Crisis prevention and recovery
Capacity
Development
Women's
Empowerment
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From The Guardian Business Series
- London
Road to Ruin.
Recession Britain. The real story behind the economic slump.
"Our writers look at the real story behind the economic slump. We find
out how boom turned to bust, ask who's to blame, and suggest ways out
of the mess we're in"
25 people at the heart
of the meltdown ...
Julia Finch picks out the individuals who have led
us into the current crisis
The greed that drove the
City's bonus culture
Jill Treanor investigates the relationship between
bonus culture and the banking crisis
Across Britain people
ask: is this country going bust?
Larry Elliott: Along the length of the M62, there is
a grim determination to survive the recession that was never supposed
to happen
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From Financial Times - London
In Depth: Global
Financial Crisis
Global Economy
World Economic Forum: Davos 2009
US
& Canada Europe UK Asia-Pacific Middle East
Africa
Americas
China
India
Brussels
Obama's first 100 days
Madoff scandal
Credit crunch
conversations
Citigroup
The
game changer by George Soros
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The Number One Issue: Who Now Runs The
Economy and Finance in the U.S.
Obama’s new U.S. Treasury Secretary is Tim Geithner, a former chief deputy of his
Democrat predecessors at Treasury - Robert Rubin (who presided in the
first Clinton government and later Citigroup over the “new financial
instruments” that have subsequently wrecked the U.S. and world
economy), and
Larry Summers (who
as Secretary of the Treasury in 1999 tore down barriers between
commercial and investment banks in the deregulation frenzy that set up
the Wall Street crash).
The Obama Crossroads:
Neo-Liberal Coup or Responsible Government
by Prof. John McMurtry*
Global
Research, February 1, 2009
Obama claims that he is bringing “fresh thinking” with Larry Summers as chief
of economic policy formation. If you think he can lead a new program of
productive economics, employment, non-oil energy, and environmentally
friendly manufacture - what every sane person wants and what Obama hope
promises - consider the track record of his economics czar. Before
becoming Clinton’s second-term Secretary of the Treasury, Larry Summers had distinguished himself as an
outspoken neoliberal advocating the loot-and-pollute globalization that
has brought cumulative ecological as well as financial catastrophe. In
a leaked Memorandum as Chief Economist of the World Bank, Summers urged
“more migration of the dirty industries to the LDCs [Less Developed
Countries]” for three reasons (all his words):
1) The measurements of the costs of health impairing pollution depends
on the foregone earnings from increased morbidity and mortality. - - -
I think the economic logic behind dumping a load of toxic waste in the
lowest wage country is impeccable and we should face up to that.
2) I've always thought that under-populated countries in Africa are
vastly UNDER-polluted, their air quality is probably vastly
inefficiently low compared to Los Angeles or Mexico City. - - [We
should prefer] world welfare enhancing trade in air pollution and waste.
3) The demand for a clean environment for aesthetic and health reasons
is likely to have very high income elasticity. - - - While production
is mobile the consumption of pretty air is a non-tradable.
Summers then explains where he stands on “deregulation” versus “moral
and social concerns” in an epitome of neoliberal life blindness: “The
problem with the arguments against all of these proposals for more
pollution in LDCs (intrinsic rights to certain goods, moral reasons,
social concerns, lack of adequate markets, etc.) is that it could be
turned around and used against every Bank proposal for liberalization.”
Summers here lets the cat out of the bag on what “liberalization”
demands to be sacrificed to it - “goods”, “moral reasons” and “social
concerns”, all the values Obama says he stands for.
After the memo became public, Brazil’s Secretary of the Environment
Jose Lutzenburger wrote back to Summers: “Your reasoning is perfectly
logical but totally insane...” Mr. Lutzenburger was fired. Summers has
become President Obama’s chief economic adviser.
* John McMurtry is Professor Emeritus,
University of Guelph, Canada, Author and Editor of Philosophy and World
Problems, Encyclopedia of Life Support Systems (EOLSS),
UNESCO. Paris. He is the author of Value Wars: The
Global Market versus the Life Economy (London:2002), The Cancer Stage
of Capitalism (London and Tokyo: 1999, 2002), Unequal Freedoms: The
Global Market As An Ethical System (Toronto and Bloomfield Ct: 1998,
2000)
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9 June 2005
Capitalist
Economic Terrorism
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Note
by Róbinson Rojas: Free-market fundamentalism, which can be
described as capitalist economic terrorism, is creating a world with a
small bunch of super rich and a big majority just surviving on their
income. United States is a telling case study of this. What began
with the Reagan Administration is reaching obscene features with
the Bush Administration. Statistics show that "for every additional
dollar earned by the bottom 90 percent of the population between 1950
and 1970, those in the top 0.01 percent earned an additional $162. That
gap has since skyrocketed. For every additional dollar earned by the
bottom 90 percent between 1990 and 2002, each taxpayer in that top
bracket brought in an extra $18,000." The New York Times is publishing
a special section ("Class Matters"), from which I select here some
important texts. They show how capitalist economic terrorism
(free-market fundamentalism) can disjoint a society. The winners are
the ones who have at their service a political class serving their
interests by unleashing political and economic terrorism (otherwise
known as globalization) all over planet Earth. They are building a
larger U.S. empire. Modern Caligulas like Bush et al are the top layer
of that political class.
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The Bush Economy (7 June 2005)
Richest Are Leaving
Even the Rich Far Behind (5 June 2005)
Crushing Upward
Mobility (7 June 2005)
Class Matters. A
special section
The Mobility Myth (6
June 2005)
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The New York Times - 10 June 2005
Losing Our Country
By Paul Krugman
"The middle-class society I grew up in no longer exists. Working
families have seen little if any progress over the past 30 years.
Adjusted for inflation, the income of the median family doubled between
1947 and 1973. But it rose only 22 percent from 1973 to 2003, and much
of that gain was the result of wives' entering the paid labor force or
working longer hours, not rising wages.
But the wealthy have done very well indeed. Since 1973 the average
income of the top 1 percent of Americans has doubled, and the income of
the top 0.1 percent has tripled."
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Center for Economic and Policy Research
The recent announcement that the U.S. has officially been in a
recession since December 2007 and the latest employment data showing record job losses in
November are but two indicators of the weakness in the economy. As a
resource for a deeper understanding of the health of the economy, CEPR
has created an Economic Crisis section featuring analysis of the
root causes of the economic down-turn as well as policy suggestions,
including a letter from over 375 economists and three nobel
laureates pushing for a second stimulus package, to help get the
economy back on track.
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Project Syndicate
Project Syndicate is an international association of
quality newspapers devoted to:
bringing distinguished voices from across the world to local audiences
everywhere;
strengthening the independence of printed media in transition and
developing countries;
upgrading their journalistic, editorial, and business capacities.
Project Syndicate currently consists of 406
newspapers in 150 countries, with a total circulation of 47,258,115
copies. Its activities fall into two broad categories:
disseminating the highest quality commentaries and analysis to its
member papers;
fostering institutional links among member papers;
Project Syndicate is a not-for-profit institution.
Financial contributions from member papers in developed countries
support the services provided free by Project Syndicate to
members in less advanced economies. Additional support comes from the Open
Society Institute, Politiken Foundation and Die Zeit
Ebelin und Gerd Bucerius Foundation.
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The
Guardian:
Global Recession
Economics The Nuclear Industry
Globalization Debt relief Famine Global population
What's wrong with our food?
Medicine and Health
The GM Food Debate
Renewable Energy
Airline industry
Enron Oil and petrol The euro
Global fishing
Global warming Renewable energy
Waste and pollution
Attack on America
Argentina
Colombia Cuba
Net news The future of Microsoft
UN conference against racism
From The Observer:
Special on the Global Economy
This special report contains a
selection of the best of The Observer's news and business commentary
and analysis.
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Róbinson
Rojas (1997) on
Basic knowledge on economics
Notes designed for students
wanting to understand the basic tenets of textbook economics (
capitalist economics, that is), without calculus, which is utilised as
a disguise to justify a barbaric economic system leading to social
exclusion and waste of human and material resources. The capitalist
economic problem: what to produce, how to produce, for whom to produce.
Resource allocation: alternative approaches, the free market versus
central planning. The meaning of "resource allocation" and the main
alternative methods of allocating resources.
Concepts for Review: Economic resources, resource allocation,
production possibility curves, supply, demand, competition,
profitability and the free market, central planning and bureaucracy,
factors of production, distribution of income, factor mobility
- Sustainable
development in a globalized economy? The odds. 1999
- Sustainable development in a
globalized economy. 1997
- Making sense of development
studies
- Notes on the philosophy of the
capitalist system
- Notes on economics: assuming
scarcity
- Notes on economics: about
obscenities, poverty and inequality
- Notes on structural adjustment
programmes
- Agenda 21 revisited (notes)
- 15 years of monetarism in Latin
America: time to scream
- Latin America: a failed industrial revolution
- Latin America: the making of a fractured society
- Latin America: a dependent mode of production
- The 'adjustment' of the world economy
- The transnational corporate
system in the late 1990s
- A market-friendly strategy for
development
- Notes on agribusiness in the 1990s
- Transnational corporations in
developing countries
- Latin America: blockages to
development
- Development Studies: Researching
for the big bosses?
- International capital and
intellectual dishonesty
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Original in French
- Translation by John Fletcher
- First
published in Esprit 12/2006
Contributed by Esprit
- © Achille Mbembe/Esprit - © Eurozine
What is post-colonial
thinking?
The
faults in Europe's universalism, especially when confronting its
colonial history, have nurtured a variety of critical perspectives in
the West. Talking to French magazine Esprit, theorist Achille
Mbembe says that postcolonial thinking looks so original because it
developed in a transnational, eclectic vein from the very start. This
enabled it to combine the anti-imperialist tradition with the fledgling
subaltern studies and a specific take on globalization, he says.
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