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The Great Austerity War: What Caused The Deficit Crisis And Who Should Pay To Fix It?, James Crotty
The Great Austerity War: What Caused The Deficit Crisis And Who Should Pay To Fix It?, James Crotty
James Crotty
Rapidly rising deficits at both the federal and state and local government levels, along with long-term financing problems in the Social Security and Medicare programs, have triggered a one-sided austerity-focused class war in the US. Similar class conflicts have broken out around the globe. A coalition of the richest and most economically powerful segments of society and conservative politicians who represent their interests has demanded that deficits be eliminated by public-sector austerity - severe cuts at all levels of government in spending that either supports the poor and the middle class or funds crucial public investment. These demands constitute a …
The Realism Of Assumptions Does Matter: Why Keynes-Minsky Theory Must Replace Efficient Market Theory As The Guide To Financial Regulation Policy, James Crotty
James Crotty
The radical deregulation of financial markets after the 1970s was a precondition for the explosion in size, complexity, volatility and degree of global integration of financial markets in the past three decades. It therefore contributed to the severity and breadth of the recent global financial crisis. It is not likely that deregulation would have been so extreme and the crisis so threatening had most financial economists adopted Keynes-Minsky financial market theory, which concludes that unregulated financial markets are inherently unstable and dangerous. Instead, they argued that neoclassical efficient financial market theories demonstrate that lightly regulated generate optimal security prices and …
Controlling Dangerous Financial Products Through A Financial Pre-Cautionary Principle, James Crotty, Gerald Epstein
Controlling Dangerous Financial Products Through A Financial Pre-Cautionary Principle, James Crotty, Gerald Epstein
James Crotty
High risk, opaque, and extremely complex financial products such as collateralized debt obligations and credit default swaps have been among the key causes of the worst economic crisis since the Great Depression. Regulators, buyers, and even many issuers of these investor or capital market products (as distinct from consumer products) did not understand how they worked in calm times, much less in times of extreme market stress. Not only have these products helped cause the crisis but they have also made the crisis extremely difficult to resolve. In response, building on the analogy of the Food and Drug Administration (FDA), …
Controlar Los Productos Financieros Peligrosos Mediante Un Principio De Precaución Financiera, James Crotty, Gerald Epstein
Controlar Los Productos Financieros Peligrosos Mediante Un Principio De Precaución Financiera, James Crotty, Gerald Epstein
James Crotty
High risk, opaque, and extremely complex financial products such as collateralized debt obligations and credit default swaps have been among the key causes of the worst economic crisis since the Great Depression. Regulators, buyers, and even many issuers of these investor or capital market products (as distinct from consumer products) did not understand how they worked in calm times, much less in times of extreme market stress. Not only have these products helped cause the crisis but they have also made the crisis extremely difficult to resolve. In response, building on the analogy of the Food and Drug Administration (FDA), …
Avoiding Another Meltdown, James Crotty, Gerald Epstein
Avoiding Another Meltdown, James Crotty, Gerald Epstein
James Crotty
The authors argue that the current financial crisis, the worst since the Great Depression, can be seen as the latest phase in the evolution of financial markets under a radical financial deregulation process that began in the late 1970s. Deregulation accompanied by rapid financial innovation stimulated powerful booms that ended in crises. But governments responded to the crises with new bailouts that allowed new expansions to begin. As a result, financial markets have become ever larger, and the crises have become more threatening to society, which forces governments to enact ever larger bailouts. The authors provide a comprehensive set of …
Was The Imf's Imposition Of Economic Regime Change Justified? A Critique Of The Imf's Economic And Political Role In Korea During And After The Crisis, James Crotty
James Crotty
As late as October 1997 the IMF declared that the Korean economy was experiencing a temporary liquidity squeeze, not a solvency problem. Yet in December 1997 Deputy Managing Director Stanley Fischer declared that Korea suffered from a systemic “breakdown of economic relations” so complete that only radical economic restructuring could restore prosperity. The IMF attached what it called “extreme structural conditionality” to its loan agreements with Korea, demanding a complete and rapid transition from Korea’s traditional East Asian economic model to a globally integrated neoliberal model. We subject the IMF’s assertion that the allocative efficiency of the Korean economy had …
The Neoliberal Paradox: The Impact Of Destructive Product Market Competition And Impatient Finance On Nonfinancial Corporations In The Neoliberal Era, James Crotty
James Crotty
No abstract provided.
Korea's Neoliberal Restructuring: Miracle Or Disaster?, James Crotty
Korea's Neoliberal Restructuring: Miracle Or Disaster?, James Crotty
James Crotty
No abstract provided.
Structural Contradictions Of The Global Neoliberal Regime, James Crotty
Structural Contradictions Of The Global Neoliberal Regime, James Crotty
James Crotty
No abstract provided.
Trading State-Led Prosperity For Market-Led Stagnation: From The Golden Age To Global Neoliberalism, James Crotty
Trading State-Led Prosperity For Market-Led Stagnation: From The Golden Age To Global Neoliberalism, James Crotty
James Crotty
No abstract provided.
Can The Global Neoliberal Regime Survive Victory In Asia? The Political Economy Of The Asian Crisis, James Crotty
Can The Global Neoliberal Regime Survive Victory In Asia? The Political Economy Of The Asian Crisis, James Crotty
James Crotty
No abstract provided.
The Case For Capital Controls, James Crotty
The Investment Decision Of The Post-Keynesian Firm: A Suggested Microfoundation For Minsky's Investment Instability Thesis, James Crotty, Jonathan P. Goldstein
The Investment Decision Of The Post-Keynesian Firm: A Suggested Microfoundation For Minsky's Investment Instability Thesis, James Crotty, Jonathan P. Goldstein
James Crotty
In this paper, Crotty and Goldstein undertake the formulation of a model of enterprise investment decision that can provide a microeconomic foundation for the Keynes-Minsky macromodels developed by Delli Gatti & Gallegati, Jarsulic, Semmler and others. The authors address the difficulties inherent in the formulation of an investmes theory in which the future is unknowable, and investment substantially irreversible. Where Minsky accepts a variation of the Tobin-q theory-in which owners and managers are assumed to be identical economic agents-Crotty and Goldstein look to Keynes' insistence on their qualitative difference. Financial commitments to creditors are certain, while expected profits are not. …
The Impact Of Profitability, Financial Fragility And Competitive Regime Shifts On Investment Demand: Empirical Evidence, James Crotty, Jonathan P. Goldstein
The Impact Of Profitability, Financial Fragility And Competitive Regime Shifts On Investment Demand: Empirical Evidence, James Crotty, Jonathan P. Goldstein
James Crotty
Crotty and Goldstein have developed a hybrid post-Keynesian/ neo-Schumpeterian theory of investment demand. In this micro-founded theory of accumulation, the optimal investment decision depends on the level of expected profitability, the degree of competition, and the degree of financial fragility. Its core assumptions are: i)the future is unknowable in principle, ii) physical capital is ii) illiquid and the accumulation process is substantially irreversible, iii) managers and owners are distinct economic agents with an unresolved principal-agent conflict, and iv) management seeks the long-term growth and financial stability of the firm itself, and guards its decision-making authority against encroachment by stockholders and …