35 research outputs found
The Political Economy of Turkey’s Economic Miracles and Crisis
No full textThis paper argues that Turkey experienced two manufactured economic miracles since 2002 which required a corrective crisis. The first miracle occurred between 2002 and 2008 when Turkey’s GDP tripled. This miracle was fictional since the increase in GDP was largely due to the appreciation of the exchange rate. During this period, Turkey experienced large current account deficits and accumulated large external debt, which are at the heart of the current crisis. Turkey experienced the second miracle between 2009 and 2013 when the economy grew faster than most countries in the world. This miracle was even more peculiar since it was associated with the deterioration of many economic and political indicators. This miracle was fostered by the 2016 revision of the Turkish Statistical Institute and therefore was also fictional. In this period, Turkey continued to experience large current account deficits and the external debt has become large enough to threaten the economy. The deterioration of the global environment marked the end of the second miracle and created the conditions for a painful adjustment. This paper argues that Turkey’s two economic miracles and the current crisis are dialectically linked and the crisis cannot be comprehended without a proper grasp of how the miracles were manufactured. © 2020, The Author(s)
What is Globalisation and What is Not?: A Political Economy Perspective
No full textDespite the widespread use of the concept there is neither a consistent theoretical construction nor a clear definition of globalisation. Although the debate between pro and anti globalisation scholars and activists is interesting, it largely fails to address globalisation as a fundamental structural transformation of modern capitalism from a historical perspective and tends to reduce it to a re-articulation of the old debate on states versus markets. The first aim of this paper is to provide a clearer definition of globalisation which will be helpful in assessing the validity of various arguments surrounding the concept of globalisation, including whether such a process exists. Then an alternative interpretation of globalisation viewed from a political economy perspective will be introduced. It will be argued that internationalisation in the form of increased trade and foreign direct investment is the nature of capitalist accumulation process, thus, cannot be impeded. This accumulation process necessarily creates its own ideological climate to facilitate acceptance of the doctrine and to justify the economic and social problems it creates. Finally it will argue that there is a globalisation tendency since increased internationalisation inevitably weakens the role of nation states by transferring some of their functions to newly created supranational states that are created by the dynamics of this internationalisation process.Globalisation; Political Economy; International Trade Organizations
Economic Freedom and Foreign Direct Investment in Latin America: A Panel Gravity Model Approach
No full textThis paper employs a panel data gravity model to examine the impact of economic freedom (EF) on foreign direct investment (FDI) in the context of Latin American countries. Our results suggest that while FDI responds to many EF measures positively, such results cannot be generalised.Economic freedom, FDI, Latin America, panel gravity model.
Exchange Rate Policies: Fact or Fiction in the Rise of High Performance Asian Economies
No full textMany economists believe that the nature of exchange rate management was an important reason for rapid economic growth in East Asia. In this view, Asian countries avoided extreme exchange rate appreciations and kept their nominal exchange rates close to market clearing levels. In contrast, the inappropriate exchange rate policies pursued by many Latin American and African countries in the late 1970s and 1980s contributed a great deal towards their poor economic performance. This paper challenges the above views on the type of exchange rate policies adopted by the East Asian, Latin American and African countries. The empirical evidence fails to prove that the exchange rate policies of the East Asian economies were significantly different from those of other developing countries.Exchange rate policy, Trade policy, East Asian Miracle, exports growth, economic growth
Which Crisis, of Which Capitalism? A Marxian and Financial Keynesian Interpretation of Neoliberalism and the Great Recession
No full textFinancial Keynesianism should be incorporated into Marxian theory to account for the current ‘great’ capitalist crisis. Capitalism moved into a new stage from the 1970s, associated with changes in banking, finance and debt, but Marxism lagged behind these developments due to its undeveloped monetary theory. The new capitalism is novel in many aspects which requires a new interpretation. The neoliberal counter-revolution was marked by tax cuts and a rise in public debt. Contrary to the common perception, rather than abolishing the state, neoliberalism redefined its functions in favor of capitalist classes. The state was in charge of directly organizing competition and embedding the ‘free’ market into other social institutions. The marketization of government functions is falsely presented as rolling back the frontiers of the state, and ‘regulation-in- denial’ is coined to indicate this contradiction. Neoliberalism is a state-driven project and has nothing to do with laissez-faire. The system was a market-generated functional equivalent of government demand management and sustained consumption by separating purchasing power from individual labor income. Borrowing was undertaken by individuals themselves on the basis of property mortgages or credit card ratings largely divorced from the labor market situation. In this sense neoliberalism can be defined as ‘privatized Keynesianism’.
Financialization, in his view, means ‘favoring financial to productive
placements’ and it was the result of the combination of government deficits
and credit squeeze. The state was pushed into becoming a permanent
debtor, forced to contain social expenditures and submit to the commands
of the financial elite. The creditors required a rising value-appreciation
of
their assets and crisis became the key gadget for them to capture political
power. In affluent times economic agents tend to invest more into riskier
projects which initially nurture faster growth but eventually develop into a
bubble and create the conditions for a crisis
Do liberal trade policies promote trade openness?
No full textAlthough trade liberalization and trade openness are assumed to be strongly associated with each other and often used interchangeably, the empirical evidence has not been forthcoming. This article is an attempt to fill this gap. By investigating the link between trade openness and trade restrictions, it argues that while a negative link between various types of trade restrictions and trade openness is evident, the relationship is weak, statistically not always significant and there is no clear evidence that the removal of trade restrictions (trade-liberalization) invariably leads to improved trade openness
Which Crisis, of Which Capitalism? A Marxian and Financial Keynesian Interpretation of Neoliberalism and the Great Recession
No full textFinancial Keynesianism should be incorporated into Marxian theory to account for the current ‘great’ capitalist crisis. Capitalism moved into a new stage from the 1970s, associated with changes in banking, finance and debt, but Marxism lagged behind these developments due to its undeveloped monetary theory. The new capitalism is novel in many aspects which requires a new interpretation. The neoliberal counter-revolution was marked by tax cuts and a rise in public debt. Contrary to the common perception, rather than abolishing the state, neoliberalism redefined its functions in favor of capitalist classes. The state was in charge of directly organizing competition and embedding the ‘free’ market into other social institutions. The marketization of government functions is falsely presented as rolling back the frontiers of the state, and ‘regulation-in- denial’ is coined to indicate this contradiction. Neoliberalism is a state-driven project and has nothing to do with laissez-faire. The system was a market-generated functional equivalent of government demand management and sustained consumption by separating purchasing power from individual labor income. Borrowing was undertaken by individuals themselves on the basis of property mortgages or credit card ratings largely divorced from the labor market situation. In this sense neoliberalism can be defined as ‘privatized Keynesianism’.
Financialization, in his view, means ‘favoring financial to productive
placements’ and it was the result of the combination of government deficits
and credit squeeze. The state was pushed into becoming a permanent
debtor, forced to contain social expenditures and submit to the commands
of the financial elite. The creditors required a rising value-appreciation
of
their assets and crisis became the key gadget for them to capture political
power. In affluent times economic agents tend to invest more into riskier
projects which initially nurture faster growth but eventually develop into a
bubble and create the conditions for a crisis
Export-Led Development: A Theoretical and Empirical Investigation.
No full textThis thesis contributes to the debate surrounding the export-led development hypothesis by critically examining its theoretical and empirical validity. The first part of this thesis challenges different versions of comparative advantage theory and argues that the theoretical foundations of the theory are weak. The second chapter goes beyond the conventional critiques, which focus on the assumptions of Ricardian comparative advantage theory, and argues that the real weakness of the theory can be found in its static nature and its simplistic treatment of labour theory of value. The third chapter argues that the neoclassical version of the theory has fundamental problems in its interpretation of capital and labour as factor endowments. It also questions the relevance of empirical work by arguing that even if the theory could predict the trade pattern of a country correctly, this would not prove its accuracy. The first part of chapter four challenges the 'dynamic' versions of comparative advantage theory and argues that the theory is static in its nature and cannot be made dynamic. The second part of this chapter evaluates the debate over trade policies and attempts to clarify the confusion over the definitions of import-substitution and export-promotion. The third part summarises and critically evaluates the controversy over the so-called export pessimism and provides theoretical and empirical evidence in support of its validity. The second part of this thesis investigates the empirical support for the export-led development hypothesis. Chapter five questions the relevance of the empirical literature by examining the measures of openness and techniques that are used. It argues that the majority of the literature is irrelevant and does not provide meaningful evidence to support or reject the export-led development hypothesis. Chapter six offers an alternative measure of trade openness, which is based on a 'structurally adjusted trade intensity' index, and empirically tests whether openness accelerates economic growth. Chapter seven criticises the World Bank's 1993 report on Asia and shows its weaknesses in terms of the trade policies adopted by Asian countries. The final chapter concludes by suggesting an alternative interpretation of the recent popularity of export-led development policies
The systemic causes of the 2008 crisis: an alternative theoretical perspective
No full textWOS: 000385216000011[No abstract available
