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Global Imbalances, Declining Hegemony and the Need for a New Global Governance

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  • Pasquale Tridico

Abstract

The objective of the paper is to show that the recovery from the current economic crisis in US and in EU requires a new policy paradigm and a new global governance. I argue that, contrary to the recent austerity policies in EU and US, a new level of government involvement is required in order to keep aggregate demand stable, make full employment possible, and create a transparent financial sector, serving the real economy and encouraging productive investments. Moreover, at global level, two main issues seem to affect negatively the markets: first the lack of an independent international currency, and second the instability of one of the biggest market, the Eurozone. The first needs a wider international solution, the latter needs a political responses at EU level in order to deepen integration

Suggested Citation

  • Pasquale Tridico, 2011. "Global Imbalances, Declining Hegemony and the Need for a New Global Governance," Departmental Working Papers of Economics - University 'Roma Tre' 0130, Department of Economics - University Roma Tre.
    • Handle: RePEc:rtr:wpaper:0130
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    References listed on IDEAS

    as
    1. Barro, Robert J, 1989. "The Ricardian Approach to Budget Deficits," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 37-54, Spring.
    2. Philip Arestis & Theodore Pelagidis, 2010. "Absurd Austerity Policies in Europe," Challenge, Taylor & Francis Journals, vol. 53(6), pages 54-61.
    3. Maria Ivanova, 2010. "Hegemony and Seigniorage," International Journal of Political Economy, Taylor & Francis Journals, vol. 39(1), pages 93-130.
    4. Rogoff, Kenneth & Obstfeld, Maurice, 2009. "Global Imbalances and the Financial Crisis: Products of Common Causes," CEPR Discussion Papers 7606, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • G01 - Financial Economics - - General - - - Financial Crises

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