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Finansal Liberalizasyon ve Küresel Krizin Yapısal Nedenleri: Gelişmekte Olan Ülkeler İçin Dersler
[Financial Liberalization and the Structural Roots of the Global Crises: Lessons for Developing Countries]

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  • TUNCEL, Cem Okan
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    Abstract

    The main aim of this study is to analyze the connection between financial liberalization and financial crises in historical context. The global economy is experiencing crisis which has been hailed as the most devastating crisis of capitalism since the great depression of 1929. Post World War II economic history can be thought of as evolving within two distinct political-economic regimes. The high growth Golden Age or Keynesian Regime was based on socially or politically ‘embedded’ domestic markets, government responsibility for aggregate demand growth, and state control over cross-border economic activity. It lasted until the early 1970s, to be replaced, after a decade of turbulence, by the Neoliberal Regime, built on deregulation, liberalization, privatization, and ever-tighter global integration. The Neoliberal Regime took root in the 1980s and consolidated in the 1990s.Financialization which is a major phenomenon of neoliberal regime, means the increasing role of financial motives, financial markets, financial actors and financial institutions in the operation of domestic and international economies. In this period, many developed and developing countries have liberalized their financial markets. The financial liberalization opens up new opportunity for financial sectors often resulting in excessive risk taking because of lack of adequate regulation particularly emerging economies. After liberalization of period, most countries tend to go though a “boom-bust” cycle especially in the case of external liberalization. As a result, currency and banking crises (twin crises) are closely linked in aftermath of liberalization. In this paper, policy framework is also discussed from developing countries perspective.

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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 42422.

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    Date of creation: 2012
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    Handle: RePEc:pra:mprapa:42422

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    Keywords: Financial Liberalization; Financialization; Financial Crises; Developing Countries;

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    1. Oğuz ESEN, 1998. "Gelişmekte Olan Ülkelerde Uygulanan Finansal Serbestleşme Programlarına Eleştirisel Bir Yaklaşım," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 13(145), pages 23-30.
    2. Adelman, Irma & Yeldan, Erinc, 2000. "Is this the end of economic development?," Structural Change and Economic Dynamics, Elsevier, vol. 11(1-2), pages 95-109, July.
    3. Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
    4. Ilene Grabel, 2003. "Averting crisis? Assessing measures to manage financial integration in emerging economies," Cambridge Journal of Economics, Oxford University Press, vol. 27(3), pages 317-336, May.
    5. Roberto Chang & Andres Velasco, 1998. "Financial crises in emerging markets: a canonical model," Working Paper 98-10, Federal Reserve Bank of Atlanta.
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