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From global imbalances to global reorganisations

Wade, Robert Hunter (2009) From global imbalances to global reorganisations. Cambridge Journal of Economics, 33 (4). pp. 539-562. ISSN 0309-166X

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Identification Number: 10.1093/cje/bep032


The world feels itself to be in transition, but to what is unclear. Will the liberal market model retain its normative primacy once some semblance of normality is restored, or will other varieties of capitalism, with a bigger role of the state, acquire more legitimacy? The answer depends partly on one’s explanation for the current crisis. This essay argues, first, that global imbalances had too important a role to ignore, in contrast to a mainstream view that focuses on mistakes in monetary policy and financial regulation. It argues, second, that in light of global dynamics, the crisis is likely to become worse by early 2010—which, on the face of it, makes significant reorganisations of capitalism more likely. The third section lays out what should be done to reconfigure capitalism at national and international levels. The final section discusses the political economy of policy reforms in terms of the difficult translation from what should be done to what can be done. The broad conclusion is that in five years from now the liberal market model will have been restored to normative primacy and ‘we must have more globalization’ will again be the elite rallying cry; but the crisis will have left behind sufficient doubts about factual propositions and value priorities that political parties and economists advocating alternatives will have more scope than they have had for the past three decades.

Item Type: Article
Official URL:
Additional Information: © 2009 Oxford University Press
Divisions: International Development
Subjects: H Social Sciences > HB Economic Theory
J Political Science > JZ International relations
JEL classification: D - Microeconomics > D3 - Distribution > D30 - General
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General
E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E60 - General
F - International Economics > F0 - General > F01 - Global Outlook
F - International Economics > F0 - General > F02 - International Economic Order
F - International Economics > F3 - International Finance > F30 - General
F - International Economics > F5 - International Relations and International Political Economy > F50 - General
G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets
Date Deposited: 09 Jan 2012 16:10
Last Modified: 20 May 2024 16:27

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