Suchergebnisse

Documents the trend toward increasingly frequent and severe economic crises, the most recent of which are the crises in East Asia, Brazil, and Russia. Argues that these are a new type of crisis that are rooted in private-to-private capital flows. Discusses several policy proposals to prevent and mitigate future economic crises, some of which are at the national level and others of which would require economic coordination. Argues that these measures would help secure economic growth and thus help promote social development and poverty alleviation. (Original abstract - amended)

Rutherford notes that in Perez's book, Technological Revolutions and Financial Capital (http://www.carlotaperez.org/), she argues the possibility of discerning "recurring historical patterns of major technical change, accompanied by cycles of financial turbulence," which she believes might explain the contemporary problems of the neoliberal economic model. In response Rutherford's questions, Perez explains her argument & discusses her belief that today's burst bubbles offer an opportunity to create a post-neoliberal politics by curbing the force of finance through carefully designed & applied regulation. She looks at the role of information & communications technology (ICT) in the current crisis & suggests how ICT could be better used, defines the "real economy," & argues that it should be decoupled from the financial economy. Perez examines the relationship of technological innovation to social & economic relations & argues that intelligent politics must regulate this relationship, keep it within bounds. Identifying viable relationships, proposing institutional innovations, & seeking long-term, equitable solutions to problems constitute the best path toward social justice. Adapted from the source document.

Defence date: 20 November 2015 ; Examining Board: Professor Russell Cooper, Penn State University, Supervisor; Professor Elena Carletti, EUI & Bocconi University; Professor Yan Bai, University of Rochester; Professor Alexander Guembel, Toulouse School of Economics ; This thesis consists of two chapters exploring how even benevolent governments may struggle to convince their citizens that they will stick to the policies that ensure the best outcomes in equilibrium. If people believe that the government will optimally choose a different policy in the event of a crisis, their reaction to that belief may in fact bring about just such a crisis. This thesis investigates the circumstances in which these kinds of commitment problems can be overcome. The first chapter is on bank resolution, where the choice between resolving insolvent banks and bailing them out creates a time inconsistency problem. To deter banks from taking excessive risks, governments want to convince them that they will choose resolution. However, when facing the costs of liquidating banks, governments may be tempted to bail them out instead. By strengthening their bank resolution regimes, governments reduce these costs, thus credibly committing themselves to choosing resolution over bailouts. Governments with greater resources face a more severe commitment problem. When banks interact strategically, improving the resolution regime can eliminate equilibria in which they coordinate on risky investment strategies. In the second chapter, Antoine Camous and I present a theory linking the cyclicality of fiscal policy to inherited public debt. When debt is low, fiscal policy is countercyclical, in the sense that the government responds to reductions in output by cutting the tax rate. Above a threshold level of debt, however, optimal fiscal policy becomes procyclical. This creates the possibility of self-fulfilling crises, in which output is low because workers expect high taxes, and the government sets high taxes because output is low. Our model suggests why highly indebted governments might implement procyclical fiscal policy during recessions, even without facing high sovereign risk premia.

This paper analyzes the relationship between income distribution and the severity of economic crises, where the severity is measured by the length and the depth of the recessions. Using an extensive panel dataset on income distribution and employing an event study framework, we find significant evidence that there is a negative association between the prevailing degree of income inequality and the severity of the recessions. In the case of high income countries that have bad income distribution, however, recessions are observed to be longer than the average. This observation is likely to result from the combination of the strong status-quo bias of the financially powerful income groups and the available means to redistribute towards the poor so as to help mitigate the pressures for reforms to improve income distribution via creative destruction. The longer period of recessions observed in developed countries than in less developed countries in the aftermath of the Great Recession is in support of this argument. The findings also reveal that recessions tend to be longer during the decade of the 1990s than the rest of the period studied. The evidence regarding the corrective effect on the recessions of accommodative fiscal or monetary policy stance, measured by the size of the government and the inflation rate, is observed to be only barely significant on average. Wirh regard to the impact of recessions on income distribution, the evidence in the paper indicates that the post-crises income distribution worsens significantly with the length but improves with the depth of the preceding recession. We also note that, in addition to the persistence effect, the lack of monetary discipline worsens income distribution in the postcrises period significantly.