* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download International Trade and Globalization
Survey
Document related concepts
Bretton Woods system wikipedia , lookup
Federal takeover of Fannie Mae and Freddie Mac wikipedia , lookup
Leveraged buyout wikipedia , lookup
Fixed exchange-rate system wikipedia , lookup
Foreign exchange market wikipedia , lookup
Dodd–Frank Wall Street Reform and Consumer Protection Act wikipedia , lookup
European Union financial transaction tax wikipedia , lookup
Foreign-exchange reserves wikipedia , lookup
Exchange rate wikipedia , lookup
Systemic risk wikipedia , lookup
Systemically important financial institution wikipedia , lookup
Currency intervention wikipedia , lookup
Financial crisis of 2007–2008 wikipedia , lookup
International monetary systems wikipedia , lookup
Transcript
Globalization and Financial Crisis Impacts on Scale, Distribution, Efficiency and Democracy US Current account balance Fixed and Floating Exchange Rates Quantitative easing Floating Impact on exports? Fixed Liberalization Theories about Financial Stability EMH FIH Hedge Speculative Ponzi EMH or FIH? How long is a stock held? 1970s and before Now High speed trading Understanding the Risks of Currency Speculation (investorguide.com) Currency speculation involves buying, selling and holding currencies in order to make a profit from favorable fluctuations in exchange rates…. It is estimated that 95% of forex participants are currency speculators, with players that include large multinationals, investment banks, hedge funds and professional traders. $5 trillion per day Financial Liberalization What is it? Why did we pursue it? What is current status? Asian flu (1997) Real estate bubble Financial speculation, Soros and devaluation Impacts of devaluation on debt Impacts on trade competitors IMF role: interest rates, taxes, government spending, bailouts Malaysia’s response Current Crisis Deregulation Increasingly concentrated wealth Obscure financial instruments Biophysical limits Positive feedback loops Profound failure of economic theory Contributing Factors to Financial Crisis Leverage Moral Hazard Adverse selection Contributing Factors to Financial Crisis Speculation Inelastic supply Inelastic demand Concentrated wealth Full and unequal planet ‘Innovative’ financial instruments Credit derivatives ($1.14 quadrillion$700 trillion) Credit default swaps (naked) (~$25 trillion?) Mortgage backed securities Collateralized debt (mortgage) obligations Systemic risk and correlation EE Explanations Biophysical limits Oil Food Positive and negative pigs “you cannot permanently pit an absurd human convention, such as the spontaneous increment of debt [compound interest] against the natural law of the spontaneous decrement of wealth [entropy]” Energy and Work Positive Feedback Loops and Self-fulfilling Prophecies Speculative bubbles and positive feedback loops Pro-cyclical monetary systems Is the global economy a complex system or equilibrium systme? Liberalization increases likelihood of FIH Finance and Distribution Concentrated wealth and speculation Too big to fail Too big to jail Growth rates greater than economic growth Policy Options Tobin Tax Speculation tax Restricting capital flows Forcing banks to hold more reserves Reducing leverage Higher marginal tax brackets and more equitable distribution Problems with national approaches