Although Minsky’s interpretation of Keynes’s macroeconomics and essential message clashes with authoritative alternative interpretations, it has become increasingly influential during the years following the Global Financial Crisis, even in mainstream circles. This paper offers a critical evaluation of Minsky’s Financial Instability Hypothesis from the perspective of the alternative Austro-Wicksellian paradigm. Although some of the similarities and/or analogies between Minsky’s approach and that of the Austrian School suggest a more than merely superficial affinity between the two theoretical frameworks (...) and although some scope for cross-fertilization between both approaches can be found, both theoretically and empirically, at a fundamental conceptual level both theories remain incompatible and difficult if not impossible to reconcile, in particular in terms of fundamental causality and in terms of policy conclusions and prescriptions. Despite the fact that Minsky’s policy conclusions are multifaceted and somewhat eclectic, they manifest a lack of familiarity with the conclusions of the Austrian analysis of the problems of central planning by Big Players such as Big Bank and Big Government. Both approaches also offer contrasting interpretations of the historical experience of the Global Financial Crisis. (shrink)

Minsky proposed classifying firms in three categories: hedge finance units which borrow no more than they are able to service in interest and principal out of operating cash flows, speculative finance units which are overleveraged to the point where they can service interest on their debt out of operating cash flows, but cannot repay the principal, and thus must continually roll over their existing debt, and Ponzi finance units, whose operating cash flows are inadequate even to service interest on their (...) debt. In Minsky’s financial instability hypothesis protracted prosperity leads endogenously to firms overleveraging themselves and transforming a market dominated by hedge finance into one dominated by speculative and Ponzi finance. Since Ponzi finance units are forced to sell off assets to service their existing interest payments, once the market is sufficiently dominated by Ponzi finance units, this creates an oversupply of assets offered for sale, and the resulting debt deflation causes a financial crisis and drastic shortage of liquidity. It appears this crisis state can be brought about by a deceptively low critical mass of Ponzi and speculative finance units. This paper uses a large 2002–2009 quarterly data set of all publicly traded North American firms and foreign firms traded on North American exchanges, a total of 8,905 stocks. Financial ratios are used to classify these firms in each quarter according to Minsky’s FIH categories. Market value is used to weight the categories, and average betas are computed as measures of volatility. Results provide dramatic support for the FIH. The FIH is then reinterpreted in terms of Austrian business cycle theory, which depends on inflationary credit expansion to drive the unsustainable prosperity. According to Minsky’s FIH, unsustainable prosperity emerges endogenously as long periods of economic expansion make borrowers and lenders alike more willing to engage in investment activities for which they fail to see the inherent risk. It becomes clear that this process is amplified and exacerbated by credit expansion. Minsky’s FIH helps flesh out some of the missing dynamics of the malinvestment liquidation phase of ABC theory, and the two views turn out to be surprisingly complementary. (shrink)

As the critics of global financial capitalism recognize, there is excessive financial instability in today's international economy. However, this instability is due not to laissez faire, but to its absence. Comparing the current world financial system to a laissez‐faire benchmark highlights the very significant differences between the two.

As the economy has grown increasingly financialized, the relationship between financial innovation and instability has attracted more attention. Previous research finds that the proliferation of complex financial innovations, like asset securitization and new financial derivatives, helped to erode the market governance arrangements that kept excessive bank risk-taking in check, inviting instability. This article presents an alternative way of understanding how financial innovations and market governance arrangements combine to shape instability. Market governance arrangements also (...) shape how financial firmsreceiveinnovations, leading to greater or lesser instability at particular times and places. I illustrate this argument by tracing the effects of changing corporate governance arrangements at large US banks in the 1990s and 2000s. Like non-financial firms in the preceding decade, banks adopted reforms associated with the shareholder value model of corporate governance. These changes to internal bank governance arrangements affected the agendas of bank executives in ways that encouraged expanded use of securitization and derivatives. Drawing from this case, I argue that a full understanding of instability in the financialized era requires closer attention to the (institutionally-structured) interests of financial innovationusers—not just to features of financial innovations themselves. (shrink)

Aquinas's teachings on usury are difficult to apply directly to the modern economy given the tremendous transformations in economic institutions and sensibilities since his day. However, his treatment of the relationship between the abstraction of money and the problem of disordered concupiscent desire proves to be helpful in understanding modern financial instability. Money invites a disordered understanding of the infinite good that is the object of human desire, channeling that desire into the fruitless quest for indefinite accumulation, which (...) is both destabilizing to the economic system and ultimately frustrates the pursuit of real goods. Aquinas's thought offers clarity about the proper role of economic goods in a life well lived that is necessary for thinking about the role finance should play in a humane economy. (shrink)

Due to the novel coronavirus pandemic, the lockdown engendered has had a vicious impact on the global economy. This analysis’ prime intention is to evaluate the impact of the United States’ economic and health crisis as a result of COVID-19 on its financial stability. Additionally, the investigation analyzed the spillover impact of the worldwide economic slowdown experienced by COVID-19 on the United States’ financial volatility. The study applied an autoregressive distributed lag model and discovered that the economic and (...) health crises that occurred in the United States portentously upset the future expectations of its investors. Conspicuously, the health crisis in Spain and Italy were ominous spillovers of the United States’ financial instability in the short-run. Likewise, an economic crisis ensued in the United Kingdom because of COVID-19 causing spillover for the United States markets’ financial instability. The examination evaluated that Asian and African nations’ economic crises perilously affects the United States’ financial stability. The study determined that financial instability occurred in the United States due to its own economic and health crises persisted for a longer period than financial disequilibrium that occurred in other nations. The analysis suggested some strategies of smart lockdown that the government of the United States and other nations should follow to restart the economic cycle through tighter controls to minimize losses by following the steps of preparing a lockdown checklist, monitoring completion of lockdown tasks, and complete a close-down stock take or count. (shrink)

Les milliers de milliards de dollars injectés pour renflouer les institutions financières pèseront sur les économies intérieures pour les années à venir. Mais les interventions massives des États ont-elles signé la fin du modèle néolibéral ? Au plan idéologique, les créations de richesse mirifiques de la haute finance ont été son principal instrument de légitimation. On a senti, et pas seulement à gauche, que le paradigme néolibéral ne sortirait pas indemne de la crise, qui pouvait même porter un coup fatal (...) à l’hégémonie américaine. L’humiliation des géants de Wall Street semblait indiquer que le monde se trouvait au seuil d’une nouvelle ère. Entre-temps, le système financier a été stabilisé sans qu’aucun de ses problèmes de fond n’ait été résolu. Malgré le déferlement d’analyses consacrées à la crise, sa portée historique reste obscure. À quoi la crise de septembre 2008 a-t-elle mis fin ? À quoi n’a-t-elle pas mis fin ? (shrink)

The novel coronavirus (COVID-19) has imperatively shaken the behavior of the global financial markets. This study estimated the impact of COVID-19 on the behavior of the financial markets of Europe and the US. The results revealed that the returns of the S&P 500 index have been greatly affected by a lockdown in the US owing to COVID-19. However, the health crisis generated due to the novel coronavirus significantly decreased the stock returns of the Nasdaq Composite index. The results (...) also showed that the economic crisis generated from the pandemic in Spain has had more impact on the IBEX 35 as compared to the health crisis itself. On the other hand, in the long-run, Italy’s stock markets are more affected by the health crisis as contrasted with the economic crisis, while, in the short-run, both lockdown conditions and economic instability lower the stock returns of FTSE MIB. The UK stock markets witnessed that in the short-run, deficiency of health management systems imperatively damaged the stock returns of the London Stock Exchange. The investigation revealed that deficiency of health systems and lockdown conditions have imperatively damaged the structure of financial markets, inferring that sustainable development of these nations is at risk due to COVID-19. The study suggested that governments should allocate more of their budget to the health sector to overcome a health crisis in the future. (shrink)

Over the past century, the rise and fall of economic policy orders has been shaped by a paradox, as intellectual and institutional stability have repeatedly caused market instability and crisis. To highlight such dynamics, this volume offers a theory of economic ideas in political time. The author counters paradigmatic and institutionalist views of ideas as enabling self-reinforcing path dependencies, offering an alternative social psychological argument that ideas which initially reduce uncertainty can subsequently fuel misplaced certainty and crises. Historically, the (...) book then traces the development and decline of the progressive, Keynesian, and neoliberal orders, arguing that each order's principled foundations were gradually displaced by macroeconomic models that obscured new causes of the Great Depression, Great Stagflation, and Global Financial Crisis. Finally, in policy terms, Widmaier stresses the costs of intellectual autonomy, as efforts to 'prevent the last crisis' have repeatedly obscured new causes of crises. (shrink)

The study examines the consequences of the COVID‐19 pandemic‐induced lockdown on the socio‐economic status of 212 female migrant workers employed in the informal sector, originating from four underprivileged districts of West Bengal, India. The study assesses the changes in their scope of employment, financial instability, and the level of violence experienced within households and workplaces in the pre‐pandemic and post‐lockdown phases. We apply the binary logistic regression to identify factors influencing their low employment scope, the t‐test to observe (...) changes in their income as a consequence of the pandemic, and the Wilcoxon signed‐rank test alongside effect size analysis to detect any rise in experiences of violence and exploitation against women. The findings suggest a notable decrease in their employment scope due to the absence of previous jobs, low wages, insecure workplaces, and family constraints; a decline in earnings; and an increased incidence of violence against them. The research suggests designing reforms to improve the current situation of female migrants, who represent one of the most marginalized sections of society. Formalizing the labor market and ensuring proper registration of these women would enable them to gain access to social security benefits, pension schemes, and relief packages that are vital for their well‐being. (shrink)

The principle of limited liability is one of the defining characteristics of modern corporate capitalism. It is also, we argue in this article, a powerful structural source of moral hazard. Engaging in a double conceptual genealogy, we investigate how the concepts of moral hazard and limited liability have evolved and diffused over time. We highlight two parallel but unconnected paths of construction, diffusion, moral contestation, and eventual institutionalization. We bring to the fore clear elective affinities between both concepts and their (...) respective evolution. Going one step further, we suggest that both concepts have come to be connected through time. In the context of contemporary capitalism, limited liability has to be understood, we argue, as a powerful structural source of moral hazard. In conclusion, we propose that this structural link between limited liability and moral hazard is an important explanatory factor of the systemic instability of contemporary capitalism and, as a consequence, of a pattern of recurrent crises that are regularly disrupting our economies and societies. (shrink)

The view from inside improves our understanding on market failure and regulation failure in financial market. The EMH fails to understand the causes of financial bubbles and crashes. Behavioral finance introduces insight from psychology. The heuristic and biases approach studied behavioral asymmetry in static environment that leads to market irrationality and information distortion. The fast and frugal thinking in decision-making further explore more complex situation under changing environment. They argue that soft-paternalistic regulation is needed under information overload. The (...) most critical issue is information uncertainty and complexity. Lacking information in frequency domain is the main barrier in managing business cycles. Data form inside reveals current limitations of financial data mainly in the short-term price changes. Microstructure studies show that pricing process is shaped by trading rules. Quantitative analysis reveals severe instability in high frequency trading and derivative market. Feasible regulation should aim to encourage new technology and sustainable growth, rather than protect obsolete technology and short-term speculation. The most fundamental challenge to sustainable economic order is the excessive size of the derivative markets that crowding out investment in real economy. This is a more severe issue than the climate change. (shrink)

Despite the Gothic’s much-discussed resurgence in mainstream American culture, the role the late 2000s financial crisis played in sustaining this renaissance has garnered insufficient critical attention. This article finds the Gothic tradition deployed in contemporary American narrative film to explore the impact of economic crisis and threat, and especially masculine anxieties about a perceived incapacity of men and fathers to protect vulnerable families and homes. Variously invoking the American and Southern Gothics, Take Shelter and Winter’s Bone represent how the (...) domestic-everyday was made unfamiliar, unsettling and threatening in the face of metaphorical and real economic crisis and disorder. The films’ explicit engagement with contemporary American economic malaise and instability thus illustrates the Gothic’s continued capacity to lay bare historical and cultural moments of national crisis. Illuminating culturally persistent anxieties about the American male condition, Take Shelter and Winter’s Bone materially evoke the Gothic tradition’s ability to scrutinize otherwise unspeakable national anxieties about male capacity to protect home and family, including through a focus on economic-cultural “white Otherness.” The article further asserts the significance of prominent female assumption of the protective role, yet finds that, rather than individuating the experience of financial crisis on failed men, both films deftly declare its systemic, whole-of-society basis. In so doing, the Gothic sensibility of pervasive anxiety and dread in Take Shelter and Winter’s Bone disrupts dominant national discursive tendencies to revivify American institutions of traditional masculinity, family and home in the wakes of 9/11 and the recession. (shrink)

Rightwing theorists argue that we owe the current financial crisis to the democratization of credit, or financial inclusion: politics interfered with the market to benefit marginalized actors, only to cause instability and risk. Leftwing theorists focus instead on financialization: namely, the shift of profit-making activities from industry to finance. These views implicitly draw on Schumpeter and Marx. Much like their intellectual progenitors, they emphasize exogenous processes to explain financial change. Here I claim that the connection between (...) financial innovation and financial inclusion is endogenous. I suggest two main typologies of financial innovators: Market Utopians (MUs) and Populist Innovators (PIs). Financial inclusion, I submit, is the byproduct of the quest for power of the latter. (shrink)

Originally published between 1925 and 1997 the volumes in this set: Discuss the Impacts of Profitability, Business Cycles and the Capital Stock on Productivity; Evaluate various approaches to managing the uncertainty inherent in the future course of the interest rate cycle; Examine the combined effect of financial instability and industrial restructuring on postwar economic growth and recession in the US; Determine what statistical and other information is needed to formulate both the objects and the means of government economic (...) policy; Ask what theoretical tools should be used in order to clarify the issues of economic policy; Examine the sociological aspects of the business cycle. (shrink)

This paper analyzes the proposal that central banks should issue digital currencies (CBDC) to provide a public alternative to private digital accounts and cryptocurrencies. We build on some The promises and perils of central bank digital currencies recent themes in political economy research to give a broader and more balanced perspective than the existing literature, highlighting both the promises and perils of CBDC. We argue that, on the one hand, the present state of the private financial sector is problematic (...) and regulators should seek to tackle the issues of financial power, financial instability and lack of adequate monetary policy options. On the other hand, implementing CBDC comes with risks of its own, such as that of creating a “Frankenstein scenario” where too much power is given to unelected technocrats. Our tentative conclusion is therefore that CBDC should be seen as a second-best option, while the primary focus of policy makers should be on the possibility of financial re-regulation. (shrink)

Since the outbreak of COVID-19, reaction quarantine, social distancing, and economic crises have posed a greater risk to physical and psychological health. Such derogatory mental health stigma is associated with adverse outcomes in the student population. The purpose of the current study is to provide a timely evaluation of the COVID-19 pandemic and its adverse effects on students’ psychological well-being to sustain economic sustainability. A thorough review of the literature and current studies, significant emphasis of socio-demographic indicators, interpretation of physical (...) symptoms, home quarantine activities, and COVID-19 unique stressors were extracted. Data were collected through electronic surveys from 640 university students at local and foreign universities. The findings revealed substantial adverse effects resulting in varying levels of stress, symptoms of depression, and specific discomfort in the case. Among COVID-19 stressors, financial instability, unpredictability toward future/career, and media exposure have been described as common factors that cause poor psychological well-being and weaken economic sustainability. COVID-19, quarantine, self-isolation, and onerous interventions primarily weaken university students’ mental health. The emphasis on this vulnerable category, however, is substantially absent from the literature. This research addresses the urgent need to develop possible solutions and preventive measures to promote economic sustainability by ensuring students’ psychological well-being. (shrink)

The main aim of this paper is to act as a corrective to the comparatively deafening silence of egalitarian political philosophy’s response to the Great Recession. The paper thus provides an accessible analysis of a new strand of empirical research into the causes of the crisis. This new literature, which has largely gone unnoticed by the broader philosophical community, maintains that the main driver of financial instability is income and wealth inequality coupled with income stagnation at the bottom (...) of the income distribution. Building on this empirical research, the paper puts forward six connections between egalitarian political philosophy broadly construed, and the findings of the new literature it surveys. These connections are understood as operating in two directions: that is, they both provide reasons for egalitarians to play a larger role in debates concerning the moral aspects of financial instability, and also offer valuable insights to egalitarians to reorient their position concerning central facets of their arguments. (shrink)

The aim of this paper is both to use Kindleberger’s thesis to analyse banking crashes of the Middle Age and to give proof of whether the medieval banks do or do not raise the same theoretical analysis as the modern banks. This is of importance, because the theories that are invoked by Kindleberger concern banks very different from the medieval banks. If the financial instability of the 14th century is similar to that of the 19th or the 20th (...) century, this leads to amend the impact and generality of Kindleberger’s instability model.L’objet de cet article est d’utiliser la théorie de Kindleberger pour analyser les krachs bancaires du Moyen Age et vérifier si les banques médiévales relèvent ou non du même appareil théorique que les banques modernes. Cela représente un enjeu important car les banques médiévales sont très différentes de celles qu’étudie Kindleberger. Si l’instabilité financière du XIVe siècle est comparable à celle des XIXe et XXe siècles, cela nous amène à reconsidérer l’impact et la généralité du modèle de Kindleberger. (shrink)

The period of very high foreclosure rates sets the 2007–8 financial meltdown apart from similar banking crises fueled by asset price booms. Why did the 2007–8 meltdown lead to a prolonged foreclosure crisis? Through a theoretical perspective built on Minsky’s financial instability hypothesis, Polanyi’s ideas about adverse consequences of commodity fiction, financialization of homes, and institutional coupling, I argue that commodifying houses as financial assets exposed mortgage loan holders to price fluctuations originating in capital markets and (...) elevated their risk of default. I show how increased exposure to price fluctuations followed from the tight coupling between U.S. housing and capital markets, a coupling that resulted directly from the rising preponderance of securitization in U.S. housing finance. I provide further evidence from countries where housing finance was tightly coupled with capital markets to countries where housing finance did not rely dominantly on capital markets. (shrink)

History shows convincingly that major transformations coincide with periods of crisis or wars. Many aspects of the contemporary world and US economy point to a possible crisis, in particular financial instability, and domestic and external imbalances. Neither hyperinflation nor deflation appear as likely issues. The consolidation of neoconservative authoritarism appears as a potential answer. Fortunately, there is a substantial opposition which can be mobilized against such trends. There are to ways of addressing the problem of alternatives. One is (...) suggested by the directions taken by oppositional movement, now on the rise. The second is critical analysis. But analysis also points up exploitable contradictions within the neoliberal and neoconservative agenda. (shrink)

In the Canadian forensic psychiatric context, the concepts of risk and dangerousness interact, intersect, and morph into the notion of significant threat to the safety of the public. Stemming from the results of a critical ethnography of the Ontario Review Board, this article unpacks the central role of forensic psychiatric nursing, as an example of a 'psych' discipline (e.g., psychiatry and psychology), in a system that is built to produce risky persons and to legitimize their detention and supervision. By using (...) excerpt of interviews conducted with nurses, ethnographic observations of Review Board hearings, and other documentary artifacts, the findings illustrate how rationalizations of risk and dangerousness are contingent on space, time, and observer. Depending on the time of the assessment or on the health‐care professional who performs it, different elements including, but not limited to, mental illness, interpersonal relationships, financial instability, and sexual vulnerability, are relied upon in very fluid, interchangeable, and discretionary ways to justify findings of dangerousness. Such a dynamic expands the reach of psychiatry's legitimacy at identifying risky conduct and controlling risky persons to domains very loosely associated with the notion of dangerousness. The work of Foucault and Castel provides the theoretical backdrop on which rests the discussion and the implications for nursing. (shrink)

There are concerns that the socioeconomic consequences of COVID-19, including unemployment and financial insecurity, are having adverse effects on the mental wellbeing of the population. One group particularly vulnerable to socioeconomic adversity during this period are those employed freelance within the cultural industry. Many workers in the sector were already subject to income instability, erratic work schedules and a lack of economic security before the pandemic, and it is possible that COVID-19 may exacerbate pre-existing economic precarity. Through interviews (...) with 20 freelancers working within the performing arts, visual arts, and film and television industries, this article explores the impact of the pandemic on their working lives. Findings suggest the pandemic is affecting the psychological wellbeing of freelancers through employment loss, financial instability and work dissonance, and illustrates the need for urgent economic and psychosocial support for those employed within the cultural sector. (shrink)

Numerous U.S. cities suffered immense fiscal strain following the subprime mortgage crisis and financial crash of 2007–8. Diminished revenues, tightened credit, and speculative financing that went bad in the aftermath fueled widespread fiscal distress on the local scale. Although the current moment resembles fiscal crises that crested in cities in the 1970s–90s, two factors distinguish the current period. First, municipal affairs have become thoroughly financialized—dominated by speculative securities and volatile debt arrangements—such that local crisis can no longer be understood (...) apart from financial market instability. Second, local fiscal politics have become increasingly removed from democratic oversight and control. This de-democratization hinders the capacity of political communities to reregulate markets and rebuild urban communities. An analytic model derived from the work of Hyman Minsky and Karl Polanyi emphasizes how cities become ensnared in a “financial instability” cycle and how communities seek to protect themselves by way of the “double movement.”. (shrink)

This article examines the historically contentious relationship between the financial market and the public as discussed in academic literature, financial journalism and prescriptive how-to invest handbooks during the late 19th and early 20th centuries. Although financial markets thrive off active public participation, speculating at stock and commodity exchanges has been a sanctioned ritual reserved for a privileged minority. We argue that the financial establishment’s intent to control market access through financial entry-barriers (such as exchange membership (...) fees and margin requirements) has been part of a bigger story we need to understand: a history of delegitimating uninitiated ‘lay speculators’ through the construction of exclusionary narratives about unfit amateur investors and morally corrupt publics. We conceptualize this process as an ongoing and delicate boundary-making exercise contributing to a market participation discourse that has been characterized by a set of reductive binaries, such as those of insider–outsider, professional–amateur and speculator–gambler. We show, however, that attempts to delineate popular participation in financial markets through these binaries have been complicated by the idea that besides being a force of market instability and collective irrationality, the public was a largely untapped source of liquidity. We argue that today’s discourse on public participation in financial markets resuscitates these simplified narratives and propose a more nuanced view of non-professional market participants being both destabilizers and liquidity-providers. (shrink)

La mondialisation ne se confond ni avec la solidarité écologique à l’échelle planétaire, ni avec la similitude des techniques de production, de communication ou de consommation, ni même avec une structure partagée entre les diverses nations. La mondialisation est un processus d’intégration de certaines cultures locales dans le système marchand. La diversité des configurations culturelles nourrit la mondialisation. Inversement, la globalité de l'environnement technique, économique et politique favorise la diversité du rapport au monde et l'individualisme. Le lien entre mondialisation et (...) internationalisation est riche d’enseignements. Il fait apparaître la source politique de la mondialisation, qui dépend de la décision, prise au niveau des états, d'élargir l’espace économique par-delà les frontières nationales. Cette recomposition de l’espace, et les bouleversements techniques, économiques et culturels qu’elle engendre, induisent des questions éthiques. Les trois principales touchent l’identité des personnes, la justice et la vérité : l'identité, car les frontières qui structurent la personne s'estompent ; la justice, du fait de 1a volatilité des prix et des rémunérations ; la vérité, face à un monde économique rendu virtuel par l'hypertrophie de sa dimension financière. Globalization should not be confused with ecological solidarity on a planetary scale, nor with techniques of production, communication, or consummation that are similar, nor even with a common culture shared between diverse nations. Globalization is a process of integration of certain local cultures in a market systeme. This diversity of cultural configurations nourishes globalization. Inversely, the globality of the technical, economic and political environment favors diversity of relationship to the world and individualism. The connection between globalization and internationalization is rich with lessons. It brings to light the political source of globalization, which depends on a decision, taken at the level of States, to enlarge the economic sector beyond national frontiers. The recomposition of this sector, and the technical, economic, and cultural upheavals that it gives rise to, introduces ethical questions. The three principles ones touch the identity of persons, justice, and truth : identity, because the boundaries that structure the person are blurred ; justice, due to the instability of prices and salaries ; truth in face of an economic world become virtual by the enlargememt of its financial dimension. (shrink)

The global financial crisis and ensuing weak growth have increased interest in macroeconomic issues within comparative political economy. CPE, particularly the dominant Varieties of Capitalism approach, has based its analyses on mainstream economics, which limits analysis of the relation between distribution and growth and neglects the role finance plays in modern economies. It overstates the stability of the capitalist growth process and understates the potential effectiveness of government interventions. Baccaro and Pontusson have suggested a post-Keynesian theory of distribution and (...) growth as an alternative. This article generalizes their point. PK theory highlights the instability of the growth process and lends itself to an analysis of income distribution and power relations. The article identifies the analysis of financialization and financial cycles, the understanding of neoliberal growth models, and the political economy of central banks as areas where PK economics provides specific insights for CPE. It also highlights that these arguments have important implications for government policy in an era of secular stagnation with ongoing social, distributional, and economic crises. (shrink)

Eric Lonergan explores our complex relationship with money. In a provocative and insightful analysis, he argues that few things seem to matter more to us, but few things are as poorly understood. Economists have long worked with the theory that our relationship to money is rational, but not all our reactions to it make sense. Lonergan shows that many of our views about money, credit and saving are little better than prejudices. The same social and emotional forces that affect quant (...) traders in the world’s financial markets can be seen in the mania of Pokémon card trading in the school playground. This fascinating book reveals the tension between money’s capacity to assist us in our lives and its propensity to cause instability and to distort our values. We are limited in our ability to control money’s power, says Lonergan, but only by understanding money better, and thinking about it less, may we get on with enjoying what we have. (shrink)

Instead of the usual apologetic treatment found in legal doctrine, linked to the determinacy, immutability or predictability of norms, this book treats legal certainty innovatively, holistically and in depth. Using a method at once analytical and functional, Professor Ávila examines the structural elements of legal certainty, from its definition and foundations to its various dimensions, normative forces and efficacies, citing a wealth of examples from case law to support each of the theses defended. No subject is more important and topical (...) than legal certainty. Problems relating to lack of understanding, instability and unpredictability of law intensify day by day everywhere, in civil law and common law countries alike. Normative sources are increasingly diverse in origin and multiple in nature. They change constantly, and present increasingly frequent problems of ambiguity and vagueness that significantly hinder their comprehension. This state of affairs, which to a greater or lesser extent is true of any legal order, justifies a return to the subject of legal certainty. In this book, essential questions are answered such as: Legal certainty in what sense? Certainty of what, for whom, in whose vision and by whom? When, to what extent, and to what end? “ it is probably the most comprehensive and systematic study ever produced on this subject using the analytical method.”. (shrink)

The concept of ‘accounts’ (Scott and Lyman, 1968) – or linguistic strategies for neutralizing the negative social meanings of norm violation – has a long history in sociology. This work examines British and American women's accounts of cosmetic surgery. In the medical literature, feminist writings and the popular press, aesthetic plastic surgery has been associated with narcissism, psychological instability and self-hatred. Given these negative connotations, cosmetic surgery remains a practice requiring justification even as its popularity increases. Drawing on interview (...) data, I argue that respondents' efforts to account for cosmetic surgery vary according to the ‘repertoires of evaluation’ (Lamont and Thévenot, 2000) made available by their own nation and, particularly, by its healthcare culture. In the market-based US healthcare system, women justify cosmetic surgery by referring to their personal and financial ‘investments’ in physical attractiveness and well-being. Such explanations are less legitimate in Britain, where healthcare is considered a social right rather than a consumer good. In the latter context, women employ narratives that medicalize the pre-surgical body by stressing the physical pain and emotional distress that it caused. (shrink)

This article examines the emergence of a ‘financial subject’ in the transformation of the UK economy since 1979, using a critical realist approach to subjectivity that investigates underlying causal mechanisms and structures as they affect daily life. Financial restructuring, including widespread borrowing and increasing personal investment, has forged links between finance markets and personal finance, as workers’ wages are financialized. This engenders entrepreneurial subjectivity, with individuals interpellated to be self-reliant in managing possible risks. It argues that the process (...) of subjectivation, where individuals recognize themselves and their goals relative to financial markets, exemplifies the development of financialization itself, since it gives an insight into the successful reproduction of social relations of finance. It illustrates the instability related to wages and inequality, as some subjects have to contend with unpredictable employment prospects as potential future risks that complicate the practices of personal investment and borrowing, creating new hierarchies bound up with the financialization of the economy. (shrink)

How and why did comparative political economy lose sight of the sources of growing macroeconomic and political instability, a problem that encompassed a growing financial bubble and then a crash in the housing market, a period of sluggish growth that plausibly constitutes secular stagnation, and a crisis of political legitimacy manifesting itself in the rise of antisystem “populist” parties? A gradual shift in CPE’s research agenda from macroeconomic to microeconomic concerns, and from demand-side to supply-side explanations, diminished its (...) ability to analyze adequately the central economic and political problems of the past twenty years. This article traces CPE’s evolution through successive “supermodels” that constituted its core research foci. To understand the current crisis, CPE needs to revisit and update its original roots in Keynes, macroeconomics, and the demand side. This shift is already happening at the margins, as CPE scholars struggle to understand the current crisis. (shrink)

In The Crisis of Global Capitalism, George Soros claims that the international financial economy is inherently unstable, and that while economists have failed to recognize this because of their commitment to static equilibrium theory, politicians have failed to stabilize the global economy because of their commitment to an unquestioned faith in the complete efficiency of laissez faire. While Soros is right to argue that market participants’ expectations about the future can cause instability, he is wrong to maintain that (...) this has gone unrecognized by economists, and his notion that we live in a world of economic laissez faire is equally mistaken. Indeed, his own analysis of the Asian financial crisis points to the “moral hazard” created by expectations of government intervention, rather than to laissez faire, as the culprit. (shrink)

Arising restrictions of global economic growth due to limited natural resources and capacity of the biosphere adversely affect on people level of life and future expectation. That leads to mass depression and social instability. To consider this problem, psycho-physiological model of onward hedonist in consumer society is developed and investigated. This model is based on the fact that human nature generates a growing desire, needs to progress. After reaching the limits of growth, member of consumer society feel persistent negative (...) emotions and dissatisfaction. It results to socio-economic stagnation, social and international instability. The first type of possible solutions to this problem is based on the global expansion of the limits of growth (e.g., increasing of macroeconomic demand as a result of new Kondratieff technological cycle). The second type of solutions refers to local limits extension of growth within one or more countries, by means of their economic, political or military expansion in the world. But such solutions lead to international instability. The third type of solutions corresponds to periodical decreasing of the macroeconomic consumption followed by its growth (e.g., global financial crisis, decay of states and their unions, national and military conflicts, wars and so on). Such solution also leads to social and international instability. Humanistic solution consists in creativity development of people (especially middle class of developed countries) to focus on spiritual development. So rising desires of these people in spiritual realm can be satisfied under limits of global economic growth. (shrink)

An organization emits carbon dioxide (CO2) and other greenhouse gases (GHGs) through its daily operations, such as the electricity used to power its offices, manufacture products, and then fossil fuels used in vehicles to distribute them. This is referred to as an organization’s carbon footprint, and there is increasing stakeholder and regulatory pressure on management teams globally to reduce them. On other words, it is increasingly critical that the quantity of carbon dioxide and other greenhouse gases that a company is (...) releasing into the atmosphere can be accurately measured in order to ensure that is being reduced accordingly. The European Union Emissions Trading System (EU ETS) is the most crucial tool for decarbonizing Europe, but it has also become a money-making machine. States and financial investors earn; for the power industry, which pays for it, the worst thing is not the system’s presence but its instability. Huge price jumps make it impossible to plan budgets and investments sensibly. This paper provides an introduction to the EU’s Emissions Trading System. As such it provides a discussion of the historical and legal context in which the EU ETS developed and now operates. This article covers the various ways in which these market dynamics, regulatory requirements and stakeholder expectations have converged to make European carbon markets a critical topic for today’s analyst. (shrink)

Addressing the dramatic situation of migrants and refugees in the Euro-Mediterranean and Euro-British space, Étienne Balibar mobilizes and questions the Marxist theoretical legacy, in particular the “law of population” and the “general law of capitalist accumulation”. Introducing the notion of “absolute capitalism” – the idea that there is no longer any existing alternative economic system to capitalism –, Balibar focuses on the violence inherent to new regimes of mobility and immobility in migration and migratory politics, focusing on borders, exploitation and (...) the segmentation of the labour-force. Contrary to traditional Marxist analysis, absolute capitalism, according to Balibar, is not characterized by stability and self-regulation, but by financial and political instability which, due to a severely limited capacity for control and restraint of violence, opens up for extreme violence. (shrink)

The last century has catapulted us into a world full of instability, uncertainty, and a sense of bewilderment. The financial-economic crisis has been added to our difficulties, further polluting our environment, our relationships, our feelings, our wounds. Pre-cariousness, lack of work and of a vision for the future have been added to our sense of emptiness and disorientation. Hope has given way to darkness. We are immersed in the crisis. The feeling of tranquillity and security that we desire (...) is fading, far away, and even forgotten. We are poised upon unstable ground, which makes us tremble and amplifies our need for stability and support. The single person favours self control and mastery, retiring narcissistically into him or herself and refusing help from anyone, not accepting any kind of wound or fragility. Behind these widespread attitudes lies the myth of total independence and of self sufficiency. Psychological and psychotherapeutic disciplines bring a change, within this context, towards a “relational turning point”, discovering in the dynamics of reciprocity the source of individual wellbeing, balance in relationships, and a sense of belonging to a community. The connection with another person makes it possible to build up a sense of oneself where multiplicity and unity, difference and belonging, individual and community coexist. Individuality and belonging are no longer opposed to one another, causing irresolvable conflict in the development of the self, but thanks to reciprocity, to the capacity of self giving and to ethics, they can be fully integrated and contribute to the daily activities, both in the individual and collective dimension, of each person. (shrink)

Economic discourse—or the lack of it—about fear is gendered on at least three fronts. First, while masculine-associated notions of reason and mind have historically been prioritized in mainstream economics, fear—along with other emotions and embodiment—has tended to be culturally associated with femininity. Research on cognitive “gender schema,” then, may at least partly explain the near absence of discussions of fear within economic research. Second, in the extremely rare cases where fear and emotion are alluded to within the contemporary economics literature (...) on risk aversion, there is a tendency to strongly associate them with women. Finally, historians and philosophers of science have suggested that the failure to consider the full range of human emotions and experience may be itself rooted in fear: a fear of the feminine. This aversion to discussing fear—especially fear as experienced by men—contributes to serious problems, especially in regard to financial market instability and ecological threats. (shrink)

The relevance of the research topic is that various approaches are analyzed on the essence of globalization, which is represented as an objective, qualitatively new process of internationalization and integration of all fields of activity of the modern civilizational structure. Analysis of the literature. The works of A. Appadarui, Z. Bauman, U. Beck, Z. Bzezhinski, F. Braudel, I. Wallerstein, E. Giddens, P. Drucker, M. Castells, T. Levitt, I. Tirikyan, K. Waite, F. Fernandez-Armestro, S. Huntington. In the post-Soviet space, the ideas (...) of globalization were developed in the works of V. Inozemtsev, V. Stepin, A. Chumakov, P. Vodopyanova, V. Voronkova, O. Punchenko, A. Zelenkova, C. Kirvel, A. Lazarevich, V. Nikitenko, A. Sosnin, A.Utkin and many others. The aim of the article is to concretize the concept of “globalization”, and also through the analysis of tectonic shifts in the world sociological system, to represent the main socio-political, cultural and civilizational dimensions of this concept. Research objectives - in the context of the stated goal, the essence of the social dynamics of a globalizing world is revealed. Research Methodology. The methodology is based on an integrated approach, due to its interdisciplinary nature. The result of the study. Sociodynamics is revealed as the process of its deployment in time and space in conjunction with the social organization of social organization, as well as with social changes and upheavals affecting the progressive course of its development. The contradictory nature of globalization has been proved, its brilliance and poverty are revealed with specific examples. The whole range of problems of globalization as a multidimensional phenomenon is actualized. The reasons that prevented the implementation of the concept of Western ideologists about building a unipolar world and the creation of a single governing body under the auspices of the United States are revealed. Sociodynamics of the global world, in the context of the goal set, is reflected through the prism of the financial and economic dimension; through the formation of frontiers, fraught with the charge of aggravation, instability, risks, dynamic chaos. Conclusions. The mechanisms of regulation of the emerging chaos in social relations - threats, sanctions, crisis fluctuations, the use of “soft power”, conflicts, etc. are substantiated. Such dimensions of sociodynamics as environmental and demographic are described, the negativity of their development at the present stage is revealed. (shrink)

Since publication of Hetzel's The Monetary Policy of the Federal Reserve, the intellectual consensus that had characterized macroeconomics has disappeared. That consensus emphasized efficient markets, rational expectations and the efficacy of the price system in assuring macroeconomic stability. The 2008–9 recession not only destroyed the professional consensus about the kinds of models required to understand cyclical fluctuations but also revived the credit-cycle or asset-bubble explanations of recession that dominated thinking in the nineteenth century and the first half of the twentieth (...) century. These 'market-disorder' views emphasize excessive risk taking in financial markets and the need for government regulation. The present book argues for the alternative 'monetary-disorder' view of recessions. A review of cyclical instability over the last two centuries places the 2008–9 recession in the monetary-disorder tradition, which focuses on the monetary instability created by central banks rather than on a boom-bust cycle in financial markets. (shrink)

Until recently, as market forces gradually prevailed over government intervention, the contractarian view had emerged as a preferred method of economic governance due to its attractiveness for business. Following the recent collapse of financial markets and the resulting recession, however, this structural form is now being called into question as the calls for more regulation and government intervention increase. In this context, this article revisits the law versus contract debate in the field of corporate law and governance. Following a (...) theoretical framework utilizing elements of game and resource-based theory of the firm, the company is envisaged as a central counterparty in repeated bargains with its stakeholders. It is shown that power dynamics, which are inherent in the repeated bargains between stakeholders and the company, are prone to imbalance rather than balance by causing cumulative increases in the relative power of stronger parties and vicious spirals of relative power loss for weaker ones. This cumulative power imbalance is then reflected in the organizational rent appropriation process, as weaker parties are eventually expropriated by stronger ones. It is therefore argued that since the contractual model is inherently prone to instability, mandatory power-balancing rules are necessary. Such (re)balancing regulation, however, would need to follow a systemic approach because stakeholder and company power is drawn from, and affected by numerous structural arrangements in the legal and economic system. (shrink)

The stage of the formation and establishment of a market economy in Georgia raises the necessity for economic science to solve fundamentally different problems concerning the improvement of the investment environment and investment climate in national economy. After the collapse of the former Soviet Union, the replacement with new relationships has been quite difficult and painful in which foreign investments should play a crucial role. Issues to be discussed include the questions that explore some of the categories and the constraints (...) of the investment climate. All this leads to the relevance of the article and, therefore, determines the purpose of the article. The research process uses general dialectical methods of socio-economic research as well as modern methods of research of economic theory. The scientific aim of the research is to highlight the current issues of the investment environment and investment climate in economy, to study the transformation processes taking place in Georgia during the last two decades, to conduct analysis using proper methods, to show the current social and political as well as other important processes, to generalize them and to form proper opinions. Findings based on research suggest that it is possible to speed up the process of economic development of Georgia. However, the situation will remain difficult in the region and the factors causing the recession _ instability in oil prices and the weakening of the national currency against the US dollar will still be present. In conclusion, the opinion can be formed that a stable and predictable legislative process is important for the investment environment. Therefore, all the parties that may undergo the changes should be informed and involved in every project planned by the government; At present, it becomes necessary to further extend the deregulation policy, which should include the development of financial and investment sectors and support of the establishment of appropriate infrastructure, promotion of the further development of microfinance institutions, investment companies and funds, designing the system of investment insurance and stimulation, elimination of unnecessary bureaucracy and artificial barriers, etc. (shrink)

Abstract In The Crisis of Global Capitalism, George Soros claims that the international financial economy is inherently unstable, and that while economists have failed to recognize this because of their commitment to static equilibrium theory, politicians have failed to stabilize the global economy because of their commitment to an unquestioned faith in the complete efficiency of laissez faire. While Soros is right to argue that market participants? expectations about the future can cause instability, he is wrong to maintain (...) that this has gone unrecognized by economists, and his notion that we live in a world of economic laissez faire is equally mistaken. Indeed, his own analysis of the Asian financial crisis points to the ?moral hazard? created by expectations of government intervention, rather than to laissez faire, as the culprit. (shrink)

EM Forster’s short story “The Machine Stops” from 1909 is widely reread and discussed again for some ten years as it portrays a science-fiction world resting on similar technological advancements as today in the digital era. Also management literature reviewed the short story with regard to centralized decision making, rationality and totalitarianism. I argue instead, that the main theme of the short story is – in Forster’s own words – the closing of a civilization in times of transition and facing (...) major challenges. I built the argument by original quotes from Forster and by portraying the years 1906–9, when Forster developed the short story. This era before the Great War starting in 1914 was characterized by euphoric ‘futurism’ based on groundbreaking innovations like ‘long distance messaging’, ‘penny post’, ‘animated films’, Ford’s assembly line, ‘Olivetti typewriter’, ‘feature film’, ‘large ships’ and ‘air transportation’ – the ingredients of the short story as I argue. At the same time these acquitted years were characterized by increasing disintegration, instability, rebellions and a financial crisis with bailout programs. Based on the analogy and as part of speculative philosophy I reconstruct the current great challenges with Forster’ shadow of fatalism and arrive at the urgency to put more effort in addressing and researching pathways out of the crisis and towards stabilization of business and society. (shrink)

The world is beset by what seem to be an interminable set of problems. Many of these, increasingly, are transnational, which is to say, that they transcend the borders of individual nations. Issues such as climate change and apparent global warming are fiercely debated, with many arguing that without a change in the way in which human beings abuse the environment, we are all doomed. The crisis surrounding the destruction of the nuclear reactor in Fukuyama, Japan as a result of (...) the devastation wrought by the massive earthquake and tsunami points to human powerlessness in the face of the forces of nature. It also points to the need to show respect for those same forces. Other crises, such as the global financial crisis, also have had a profound impact on human lives. While it is difficult to quantify, the global financial crisis has undoubtedly been responsible for many deaths also, as aid money decreases and projects which may have helped solve housing shortages, provided sanitation and clean water are unable to proceed. There is a need to reconfigure capitalism so that it serves the common good, rather than the self indulgent needs of venal speculators. Glaring inequalities in the distribution of the common wealth of countries are just as evil in the United States, China, India, Australia and the United Kingdom, to name a few of the G20 nations, as they are anywhere else. The recent wave of protest throughout the Middle East which saw the ousting of the Libyan dictator, Gaddafi and the Egyptian president Mubarak, should not be seen as simply a sign of the inherent instability in those countries, but as a sign that oppressive policies wherever they are met will eventually result in the overthrow of corrupt regimes.The situation in Syria is, of course, particularly parlous and points to the need for stronger international law. This paper argues that philosophy has a serious role to play in thinking about global issues and, using the example of global ethics, shows how it is central in the explication of the values that underpin proposed solutions to global problems. Though cultures are different, it is proposed, recent history shows that human beings share common values and purpose. (shrink)

Slavoj Žižek and Srecko Horvat combine their critical clout to emphasize the dangers of ignoring Europe's growing wealth gap and the parallel rise in right-wing nationalism, which is directly tied to the fallout from the ongoing financial crisis and its prescription of imposed austerity. To general observers, the European Union's economic woes appear to be its greatest problem, but the real peril is an ongoing ideological-political crisis that threatens an era of instability and reactionary brutality. The fall of (...) communism in 1989 seemed to end the leftist program of universal emancipation. However, nearly a quarter of a century later, the European Union has failed to produce any coherent vision that can mobilize people to action. Until recently, the only ideology receptive to European workers has been the nationalist call to "defend" against immigrant integration. Today, Europe is focused on regulating the development of capitalism and promoting a reactionary conception of its cultural heritage. Yet staying these courses, Žižek and Horvat show, only strips Europe of its power and stifles its political ingenuity. The best hope is for Europe to revive and defend its legacy of universal egalitarianism, which benefits all parties by preserving the promise of equal representation. (shrink)

Relevance of the article is determined that current conditions in global financial markets to impose competitiveness and solvency of the stock market higher requirements to meet is becoming increasingly difficult given the present realities of economic instability and uncertainty. Defects of the stock market Ukraine is its low capitalization, liquidity, limited range of financial instruments. In this regard it more urgent study of current conditions, trends and characteristics of the stock market. The article is an analysis of (...) the dynamics of the stock market based on the calculation of integrated indicators in individual segments. Integrated indicators are used to obtain information about the state of the securities market as a whole or its individual segments, as well as the qualitative state of the infrastructure market. The integral index is a measure of activity in the securities market within national boundaries, which characterizes the state of domestic markets that exist in this country, or the share of which accounts for a significant portion of the securities market of the country. In the article the estimation of the dynamics and structure of registered volume of securities on the stock market of Ukraine, the number of issues, trading volumes on their stock exchange and OTC segment is given. Analysis is conducted by main financial instruments: stocks, state, municipal, corporate bonds, derivatives, securities, collective investment institutions. The methodical approach to the integrated assessment of the stock market Ukraine on the basis of calculation of integral index is grounded. The reasons of deteriorating it, reducing the share of trading quality financial instruments represented primarily government bonds Ukraine, which are traded on the stock exchange segment, and increase the proportion of shares and securities of joint investment institutions, many of which are not traded on the stock exchange and has low liquidity. (shrink)

Eric Lonergan explores our complex relationship with money. In a provocative and insightful analysis, he argues that few things seem to matter more to us, but few things are as poorly understood. Economists have long worked with the theory that our relationship to money is rational, but not all our reactions to it make sense. Lonergan shows that many of our views about money, credit and saving are little better than prejudices. The same social and emotional forces that affect quant (...) traders in the world’s financial markets can be seen in the mania of Pokémon card trading in the school playground. This fascinating book reveals the tension between money’s capacity to assist us in our lives and its propensity to cause instability and to distort our values. We are limited in our ability to control money’s power, says Lonergan, but only by understanding money better, and thinking about it less, may we get on with enjoying what we have. (shrink)

The purpose of this research is to explore corporate governance and CEO remuneration with banks capitalization strategies and payout policy within the Pakistani banking context. Data were obtained from the financial statements of scheduled banks listed on the Pakistan stock exchange from 2005 to 2020. The findings of the research study revealed that corporate governance mechanisms that promote the bank's shareholders' interests are linked to low capitalization strategies. The size of the board of directors has a significant impact on (...) the capitalization of banks. Banks' capitalization techniques are also adversely correlated with effective board size. The shareholder benefits from low capitalization. Corporate governance is positively related with banking sector instability, as seen by this negative correlation. Bank capitalization strategies have a significant impact on CEO remuneration. In the event of an income shock, dividend payout is essential. Banking sector payout policies are negatively related with corporate governance. In the event of a negative income shock, financial institutions reduce dividends. As a result, it has been argued that effective corporate governance benefits shareholders by reducing capitalization tactics and limiting financial institutions' aggressive payouts.JEL classificationG21, G30, G32, G35. (shrink)

Over the past year, we have seen banks tumble, City firms collapse and the advent of the worst financial crisis since the 1930s. At the heart of these events lies the pursuit of money. But just what is this thing that seems so powerful and omnipresent and yet is physically worthless - a piece of paper, or a digit on a computer screen? How does it work? And, more importantly, how far can we control the power it has over (...) our lives? Eric Lonergan explores our complex relationship with money. In a provocative and insightful analysis, Lonergan argues that few things seem to matter more to us, but few things are as poorly understood. Economists have long worked with the theory that our relationship to money is rational, but not all our reactions to it make sense. Lonergan shows that many of our views about money, credit and saving are little better than prejudices. The same social and emotional forces that affect quant traders in the world's financial markets can be seen in the mania of Pokemon card trading in the school playground. This fascinating book reveals the tension between money's capacity to assist us in our lives and its propensity to cause instability and to distort our values. We are limited in our ability to control money's power, says Lonergan, but only by understanding money better, and thinking about it less, may we get on with enjoying what we have. (shrink)