Essays on the Financial Crisis and Globalization
AbstractWe have certainly been living in interesting times. While avoiding the worst connotations of that concept (no global war or other catastrophe), we have seen the fall of communism, the rise of information technology, and the beginnings of a shift in the global economic balance, back toward the days before the industrial revolution, when Asia carried as much economic and political weight as the West. All three trends â€“ the ostensible triumph of capitalism, the innovations wrought by digital technologies, and the growth of China and (to some extent) India â€“ in some ways came to a head in the current financial crisis. The crisis was sudden, and at one stage seemed that it would engulf the world economy in depression and even chaos. It prompted some fevered writing, by journalists in particular. For my part, writing fortnightly columns for Indian financial dailies (first the Financial Express, then The Mint), I have seen my role as bringing analytical economic thought to bear on understanding current events. A column gives one some freedom to opine, but also imposes disciplines of concision and clarity, beyond the usual requirements of academia. The following dozen pieces were written between September 2007 and April 2009. They comment on the reasons for the crisis, and possible solutions, using economic theory to understand the issues wherever possible, but in relatively non-technical language. What keeps markets working well? What do financial markets accomplish, at a fundamental level? Why do markets fail? Why do scandals arise? What can regulators do to improve matters? I have tried to shed light on these basic questions in the context of current events. Along the way, I have had the temerity to take issue with Alan Greenspan, George Soros and Martin Wolf, all bigger names than I, but less well versed in the core principles of economic analysis. My sympathies lie with other professional economists: George Akerlof, Nouriel Roubini and Larry Summers come out well in these pieces, though I take issue with Summersâ€™ implicit politics with respect to globalization. Several essays look at aspects of globalization, and view with optimism the potential of emerging economies. Another underlying theme is that the crisis was not about the collapse of capitalism, but rather arose from some specific failures of institutional design in so-called advanced economies. Getting this lesson right is critical for economies that want to go beyond being just â€œemerging.â€ Readers must judge if I have made my points clearly and convincingly enough.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Center for Global, International and Regional Studies, UC Santa Cruz in its series Center for Global, International and Regional Studies, Working Paper Series with number qt5rj3r1nj.
Date of creation: 01 Sep 2009
Date of revision:
Contact details of provider:
Web page: http://www.escholarship.org/repec/cgirs/
Environment and Development; Global Economics; Globalization and Regulation;
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statistics
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.