making the same mistake again or is this time different the world faces an economic crisis of unprecedented proportions but much of the policy response has certainly not lacked for precedent national governments and international organisations including the international monetary fund imf have looked to crises of the past for solutions to the present and austerity has become a familiar theme the inability to effectively resolve the current crisis however gives rise to the question is this time different this article provides a broad overview to the origins and development of the recent economic crisis and the resort to policies of austerity although there is historical precedent for the resort to austerity such as the uk treasury view during the 1920s and 1930s this time things are different many of the current problems are deeply rooted and reflect the impact of the shift towards free market economics that started in the 1970s 2 the origins of the crisis since the beginning of the 1970s the private sector finance in particular has reorganised on an increasingly global scale it has innovated in terms of both structure and products and it has experienced significant growth as tridico 2012 this issue shows this financialisation was characterised by a ballooning of stock exchanges as many firms decided not only to list their shares but also to become involved in speculative finance in response to pressures on firms to maximise shareholder value together with the progressive erosion of worker and trade union rights and influence labour markets became more flexible and real wages stagnated concurrently profits rebounded leading to burgeoning inequality in this context aggregate demand and consumption were bolstered by easy credit and the wealth effects of speculative bubbles first in stocks and shares and then in housing

the role of the media in fiscal consolidation programmes the case of ireland a number of european countries have implemented austerity programmes since the onset of the current economic crisis this paper focuses on fiscal consolidation a central aspect of such programmes using the case of ireland it investigates the significant role of the mass media in presenting such policies to the public a role which has so far remained unexamined conceiving of the irish experience over the past few decades as a case of neoliberalisation it uses a critical political economic conceptualisation of news organisations to consider 431 editorials and opinion articles discussing fiscal consolidation in three leading irish newspapers between 2008 and 2012 it finds that the majority of articles present viewpoints in favour of fiscal consolidation and display a preference for spending cuts over tax hikes which substantiates the claim that ireland has adopted neoliberal policies to address the crisis only a minority of articles oppose fiscal consolidation these mostly contest specific spending cuts but usually fail to criticise fiscal consolidation itself by calling for economic alternatives such as keynesian stimulus differences between newspapers are also discussed highlighting their ideological cleavages

detecting abnormal credit union performance abstract credit unions are an important financial intermediary but little credit union research is done a primary reason for the lack of research is the cooperative nature of the industry making traditional methods of detecting abnormal performance inappropriate this paper proposes two methods of detecting abnormal performance one parametric the other non parametric instead of testing the efficiency of the institution this paper proposes testing the return vector as indicated in the theoretical objective function of the member simulations demonstrate that both methods are correctly specified and powerful

financial markets and development my views on this subject have been greatly affected both by the experience of developing countries during the past quarter century and by the major shift evolutionary if not revolutionary in the economists paradigm over that period we have seen that capital accumulation is not enough even the extremely high rates of savings of many of the socialist economies have not managed to compensate for their lack of ability in allocating capital and these countries have for the most part not fared well but extreme free market solutions have fared little better perhaps best illustrated by the experience of chile true believers in the doctrines of the left and the right have this in common they both claim that if the patient had only followed the doctor s orders more precisely the medicine would have worked

averting crisis assessing measures to manage financial integration in emerging economies the asian crisis provides heterodox economists with the opportunity to investigate counterfactually whether the financial policies they have proposed would have averted the crisis the paper argues that neo liberal financial integration introduces distinct risks to emerging economies currency flight fragility contagion and sovereignty risks the paper presents the financial policies endorsed by the heterodoxy transactions taxes trip wires and or speed bumps convertibility restrictions the chilean model and a publicly managed mutual fund the paper considers whether these policies mitigate risks and whether they could have prevented the asian crisis and the transmission thereof the paper concludes with policies to avert future crises copyright 2003 oxford university press

making economic policy in weak democratic post crisis states an indonesian case study summary economic crises in developing countries differ in their causes severity and recovery trajectories the literature on the causes and immediate management of these crises is well developed however it is more difficult to develop an a priori framework which facilitates an analytical interpretation of how crises affect economic policy and hence recovery this is especially so in the commonly occurring twin crises in which an economic crisis interacts with regime collapse country studies are needed to contribute to the development of such a framework this paper addresses these issues with reference to indonesia s deep economic and political crisis of 1997 98

the government financial system and large private enterprises in the economic development of south korea abstract the paper investigates the main characteristics of the government business relationship in south korea in the past three decades to find out how it may have contributed to south korea s economic development it proposes that the government and large private enterprises in south korea should be viewed as constituting an internal organization namely a quasi internal organization as such extensive intervention by the government with south korea s financial system can be viewed as an internal capital market and consequently it could have led to a more efficient allocation of credit than possible in a free market financial system it also argues that the quasi internal organization has made it possible for the government to efficiently implement its developmental policies it is however pointed out that for the quasi internal organization to be successful in accelerating the pace of economic development the country must have a political leadership committed to the goal of economic development and must adopt an outward oriented development policy

the great east asian capital flow reversal reasons responses and ramifications the exodus of foreign capital combined with the flight of domestic funds abroad caused massive depreciations especially against the us dollar of the indonesian rupiah thai baht malaysian ringgit philippines peso and south korean won the currencies of the economies hereafter termed the asian 5 it also caused dramatic stockmarket falls in the greater east asian region including hong kong and singapore at times in us terms the indonesian rupiah was worth only one fifth of its june 1997 value while the thai baht and korean won lost around half their former values the philippines peso and malaysian ringgit fell some 40 per cent below pre crisis values this paper briefly examines the build up and subsequent sharp reversal of international investment in east asia in the 1990s before addressing the international public policy issue of whether international capital flows considered too unpredictable volatile and destablising by many economists should again be restricted finally the paper suggests that the impact of the redirection of international investment on the world economy should generate alternative export opportunities in other advanced and emerging regions thus minimising the contractionary effect of the asian crisis on the world economy

models of currency crises with self fulfilling features the discomfort a government suffers from speculation against its currency determines the strategic incentives of speculators and the scope for multiple currency market equilibria after describing an illustrative model in which high unemployment may cause an exchange rate crisis with self fulfilling features the paper reviews some other self reinforcing mechanisms recent econometric evidence seems consistent with the practical importance of these mechanisms

interpreting the korean crisis financial liberalisation industrial policy and corporate governance as the interpretation of its economic miracle has been so the interpretation of the recent crisis in korea remains highly controversial 1 although there are many important issues which have been raised by the korean crisis such as exchange rate policy labour market policy and the architecture of the international financial system chang 1998a three issues have been especially controversial in the debate financial liberalization industrial policy and corporate governance

are high growth firms one hit wonders evidence from sweden most firms do not grow and a small number of high growth firms seem to create most new jobs these firms have therefore received increasing attention among policymakers the question is whether high growth tends to persist we investigate this question using firm level data from sweden during 1997 2008 we find that high growth firms had declining growth rates in the previous 3 year period and their probability of repeating high growth rates was very low thus these are essentially one hit wonders and it is doubtful whether policymakers can improve economic outcomes by targeting them

a developing country view of the current global crisis what should not be forgotten and what should be done macroeconomic theory will surely be affected by the current global crisis there are signs that some old theories and insights will have a comeback this paper argues that among them economists should not forget the lessons that have been learnt from three decades of several financial crises in developing countries we emphasise two important lessons first preventing crises in developing countries requires not only the regulation of domestic financial systems but also a consistent set of macroeconomic policies in particular we stress the need for consistency between the exchange rate rule the capital account regime and the domestic financial market regulations second financial crises in developing countries tend to worsen both the balance of payments and the fiscal balance traditional adjustment policies tend to exacerbate the recessive trends in output and employment this is just the opposite of what is required and what governments in developed countries are able to do developing countries should push for an agenda that helps them deal with these problems

profitability and product differentiation in greek food industries this paper explains the increasing difference between the profit margins of differentiated and undifferentiated greek food manufacturing industries between 1988 and 1994 using panel data the 2sls results for the fixed effects model show important differences across the high medium and low differentiated industry groups the increasing difference between the margins of the highly differentiated group which includes the most profitable industries and the other groups can be mainly attributed to the greater sensitivity of margins in differentiated industries to advertising and demand changes

real exchange rate overvaluation and currency crises evidence from thailand this article examines real exchange rate rer misalignment in thailand in the lead up to the 1997 1998 currency crisis the methodology involves estimating the long run equilibrium rer based on the internal and external balance approach rer misalignment is measured by comparing the actual rer with the estimated long run equilibrium rer the results suggest that there was a persistent rer overvaluation from 1991 up to the onset of the crisis in 1997 too much net short term capital inflows and government expenditure expansion were the main contributory factors after the massive depreciation of nominal exchange rate during the crisis the rer seems to have gradually returned to its long run equilibrium level

vulnerability to a currency crisis lessons from the asian experience are currency crises caused by manias and panics in financial markets or by unsustainable deteriorations in domestic macroeconomic conditions this question is explored in the context of the recent asian currency crisis the theoretical concept of vulnerability is used to identify three early warning indicators of susceptibility to a currency crisis rapid accumulation of mobile capital domestic lending booms and overvalued exchange rates it is shown that the crisis and noncrisis countries of asia may be distinguished empirically using these indicators over the decade preceding the crisis this exercise provides convincing evidence that the crisis emanated largely from domestic macroeconomic conditions

the evolution of cost productivity and efficiency among us credit unions abstract advances in information processing technology have eroded the advantages of small scale and proximity to customers that traditionally enabled small lenders to thrive nonetheless the membership and market share of us credit unions have increased though their average size has also risen we investigate changes in the efficiency and productivity of us credit unions during 1989 2006 by benchmarking the performance of individual firms against an estimated order quantile lying near the efficient frontier we construct a cost analog of the malmquist productivity index which we decompose to estimate changes in cost and scale efficiency and changes in technology we find that cost productivity fell on average across all credit unions but especially among smaller credit unions smaller credit unions confronted a shift in technology that increased the minimum cost required to produce given amounts of output all but the largest credit unions also became less scale efficient over time

are credit unions too small abstract u s credit unions serve 93 million members hold 10 of u s savings deposits and make 13 2 of all nonrevolving consumer loans since 1985 the share of u s depository institution asse

firm growth and liquidity constraints a dynamic analysis using a large unbalanced panel data set of portuguese manufacturing firms surviving over the period from 1990 to 2001 the purpose of this paper is to examine whether liquidity constraints faced by business firms affect firm growth we use a gmm system to estimate a dynamic panel data model of firm growth that incorporates cash flow as a measure of liquidity constraints and persistence of growth the model is estimated for all size classes including micro firms our findings reveal that smaller and younger firms have higher growth cash flow sensitivities than larger and more mature firms this is consistent with the suggestion that financial constraints on firm growth may be relatively more severe for small and young firms nevertheless the same finding can be interpreted in a different way if we consider the more recent literature which interpret the higher investment cash flow sensitivity of younger and smaller firm in absence of financial market imperfection as the outcome of these firms reaction to the fact that realisation of their cash flows reveals them the direction to go in presence of uncertainty of their growth prospect besides firms that were small and young at the beginning of the sample period exhibited more persistent growth than those that were large and old finally these results have significant policy implications

financial restriction and the developmental state in east asia toward a more complex political economy recent financial crises in asia have renewed debates over the appropriate degree and scope of government intervention in financial markets governments in two countries affected by financial crises

capital market crises liberalisation fixed exchange rates and market driven destabilisation everyone knows the epigraph to anna karenina happy families are all alike every unhappy family is unhappy in its own way tolstoy may well have been right about families but the extension of his judgement to economies hit by capital market crises distinctly fails their causes and unhappy consequences in latin america and asia over the past 20 years have many elements in common

the effect of financial liberalization on the efficiency of credit allocation some evidence from korea abstract this paper examines korea s recent experience with financial liberalization to find empirical evidence for the mckinnon shaw hypothesis regarding the effect of financial liberalization on the allocative efficiency of credit this involves analyzing changes in the variation of average borrowing costs across different sectors and industries using consolidated balance sheets and income statements from firms it demonstrates that there has been a substantial improvement in the efficiency of credit allocation since 1980 when the korean government started to implement various financial liberalization reforms

testing for unit roots in panel data are wages on different bargaining levels cointegrated theoritical considerations suggest that spillover forces equalize wages for similar jobs thus it is expected that firm wages are cointegrated with the corresponding wage rates on an industrial level in this paper we apply various unit root tests to a panel of wage data we show that the familiar techniques can be adopted to this type of data allowing for unobserved heterogeneity and common time effects our results suggest that firm and industry wages both possess a unit root in the autoregressive representation however ther is only weak evidence for a cointegration realtionship

the euro crisis undetected by conventional economics favoured by nationally focused polity this article interprets the initial success of the launch of the euro and its muddling through since the outbreak of the greek sovereign debt crisis two interrelated processes interacted to deliver a quite complex idiosyncratic systemic crisis first new classical macroeconomics had diffused the belief that market economies are structurally stable money is neutral financial markets are efficient and that the only culprit is public finance the euro crisis was thus inaccurately diagnosed second in the political arena monetary integration has been used by many governments as a justification for liberalisation reforms opposed by various domestic social groups at the european level most governments have been defending national interests whereas the european commission and european parliament had lost most of their expertise and legitimacy in defending a common community in line euro ambitions crisis resolution calls for leadership from a key collective actor to return coherence to the eurozone s institutional setting copyright oxford university press

financialised internationalisation and structural hierarchies a mixed method study of exchange rate determination in emerging economies this paper conducts an extensive mixed method study of exchange rate determination in the brazilian foreign exchange market it combines semi structured interviews with foreign exchange market participants in brazil and london and advanced time series econometrics in line with post keynesian theory and critical realist ontology the interviews uncover the context specific expectations and underlying processes and structures that condition exchange rate dynamics in brazil and emerging economies more generally the results point to important structural changes in brazil s financial integration in the form of currency internationalisation and financialisation moreover they show that this internationalisation has been mediated through a structured and hierarchic international monetary system which fundamentally distinguishes exchange rate drivers in emerging economies from those in developed ones

age size growth and survival uk companies in the 1980s this paper examines growth and survival amongst quoted and unquoted u k companies in the period 1975 85 and compares the results with earlier u k and u s studies an examination of death rates shows that smaller companies had higher death rates but the largest and smallest companies were least vulnerable to takeover careful attention is therefore paid to problems of sample selection bias it is shown that smaller companies grew faster than larger companies that gibrat s law does not hold amongst smaller firms that age is negatively related to growth and that these results are not an artifact of sample selection bias copyright 1994 by blackwell publishing ltd

marketing the third world the contradictions of portfolio investment in the global economy abstract while international portfolio investment pi in emerging markets has flourished during the 1990s the macroeconomic and political dilemmas introduced into these site economies by this development have not been adequately explored this paper presents a keynesian analysis of the effects of these inflows the paper argues that a dependence on pi can constrain the autonomy of macroeconomic policy and introduce increased risk in site economies the paper then applies this framework to recent mexican experience the paper concludes with a call for aggressive management of portfolio investment and outlines some measures toward this end

dependency theory and taiwan analysis of a deviant case the case of taiwan represents a challenge to two predictions from dependency theory that foreign economic penetration leads to slow economic growth and also to heightened inequality since the early 1950s taiwan has received massive foreign aid and investment but it has also had one of the highest sustained rates of growth in the world while income inequality on the island has decreased substantially an examinatin of this deviant case is pursued by consideration of the various mechanisms dependency theorists claim are responsible for the linkage of foreign economic penetration to stagnation and inequality in the taiwan case none of these mechanisms work out as predicated instead a variety of factors including the nature of the japanese colonial experience the emphasis on labor intensive enterprise and the absence of an entrenched burgeoisie created a situation in which both rapid growth and increasing equality could occur consideration of taiwan draws attention to flaws in the arguments of most

economies of scale and economies of scope in multiproduct financial institutions a study of british columbia credit unions this paper investigates the production technology facing computerized credit unions in canada a full system of translog cost equations is estimated in order to test for economies of scale economies of scope and other production characteristics in a multiproduct context the regression results indicate that most of the credit unions in our sample experience significant increasing returns to scale as they expand their level of output there is also evidence of cost complementarity or economies of scope in their mortgage and other lending activities as a result legislation which limits the ability of credit unions to grow and diversify will likely raise the operating costs of this important group of financial institutions additional structural tests of the most general translog specification suggest that none of the restrictive production conditions commonly imposed by other researchers using cobb douglas and ces specifications provide a valid representation of credit union technology the results of many earlier studies are therefore open to question this paper presents a number of structural tests of the production technology facing large computerized credit unions in canada a full system of translog cost equations is estimated using detailed cross sectional data on british columbia credit unions the parameter estimates obtained from our multiproduct specification allow us to test for economies of scale economies of scope and factor substitution unlike many earlier studies the present paper introduces the various outputs as separate variables instead of crudely proxying them with a single output measure such as total assets the total number of loans or the number of depositors by explicitly recognizing the multiproduct nature of the intermediation process we are able to address more interesting production questions and remove some of the bias caused by misspecification and measurement error in simpler approaches the flexible translog specification allows us to estimate the sensitivity of costs to proportionate increases in all outputs economies of scale as well as the cost savings firms realize by producing several outputs jointly rather than specializing in the production of one economies of scope the test results reported in the latter part of the paper suggest that increasing returns to scale exist in almost all of the credit unions in our sample though

not your grandfather s imf global crisis productive incoherence and developmental policy space the response by the international monetary fund imf and developing country national governments to the current global financial crisis represents a moment of what i term productive incoherence which has displaced the constraining neoliberal coherence of the past several decades productive incoherence refers to the proliferation of inconsistent and even contradictory strategies and statements by the imf that to date have not congealed into any sort of new organised regime those who see continuity at the imf emphasise the reassertion of the imf s authority the reiteration of pro cyclical policy adjustment and the maintenance of existing governance patterns within the institution in contrast evidence of discontinuity includes a world now populated by increasingly autonomous states in the south the normalisation of capital controls and fund conditionality programmes that are inconsistent in key respects in the face of this evidence it is best to understand the current conjuncture as an interregnum that is pregnant with new development possibilities

import substitution and export led growth a study of taiwan s petrochemical industry abstract in this paper the study of taiwan s petrochemical industry is used to discuss the validity of certain hypothesis concerning the economic success of the asian newly industrializing countries nics we find in the case of taiwan s petrochemical industry that in order to promote local upstream production import substitution was a supplementary strategy in taiwan s export led growth moreover and contrary to the neoclassical hypothesis the state played a crucial role in the initial stage of the industry s development in the 1970s and has continued to provide help and subsidies until the present time this strategy was succesful insofar as export growth in the downstream sector was maintained after 1982 the state increased its subsidies without significant effect on growth suggesting both the growing political clout this industry and a decline in the state s autonomy

the growth of us credit unions abstract the growth of us credit unions during the 1990s is investigated empirically using univariate and multivariate cross sectional and panel estimation techniques univariate tests of the law of proportionate effect suggest that in general large credit unions grew faster than their smaller counterparts on average credit unions with above average growth in one period tended to experience below average growth in the next smaller credit unions tended to have more variable growth than large ones while credit unions share a common co operative philosophy they differ in terms of age profile scope for membership growth charter type and financial structure and performance in estimations of a multivariate growth model most of these characteristics are found to have a significant influence on the size growth relationship while large state chartered credit unions grew faster than their smaller counterparts the reverse was true for federally chartered credit unions in general if larger credit unions grew faster than smaller ones they tended to do so for specific reasons because their charters were less restrictive because they were more efficient or because they had a financial structure that was more conducive to growth therefore credit union growth was not random but highly systematic

the diversification and financial performance of us credit unions abstract for us credit unions revenue from non interest sources has increased significantly in recent years we investigate the impact of revenue diversification on financial performance for the period 1993 2004 the impact of a change in strategy that alters the share of non interest income is decomposed into a direct exposure effect reflecting the difference between interest and non interest bearing activities and an indirect exposure effect which reflects the effect of the institution s own degree of diversification on both risk adjusted and unadjusted returns measures a positive direct exposure effect is outweighed by a negative indirect exposure effect for all but the largest credit unions this may imply that similar diversification strategies are not appropriate for large and small credit unions small credit unions should eschew diversification and continue to operate as simple savings and loan institutions while large credit unions should be encouraged to exploit new product opportunities around their core expertise

capital flows to emerging economies minsky in the tropics capital inflows to emerging economies have a significant exogenous component they are very large when scaled to the size of the domestic financial sectors of recipients and they have large real macroeconomic effects they also sow the seeds for the ensuing sudden stops or capital flow reversals observed in financial crises in emerging markets this paper tests the implications of applying the kindleberger minsky model of financial crises to capital account reversals in emerging economies or sudden stops as they have been called in the recent literature it uses a panel probit framework with heterogeneous unobserved country effects the most important variables that account for sudden stops are preceding capital surges the share of flows other than foreign direct investment the size of the current account deficit contagion from sudden stops in other emerging markets and the ratio of external debt to exports the main policy conclusion is that emerging economies need specific policies to deal with capital surges in addition macroeconomic policies geared toward preserving sustainable macroeconomic balance may be necessary to avoid sudden stops but they are clearly insufficient copyright the author 2010 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

latin america and the global financial crisis the current world economic crisis has hit latin america very hard although financial conditions have deteriorated particularly since september 2008 the financial shock has been less severe than during the two previous crises thanks to improvements in external balance sheets there has been room for counter cyclical credit and monetary policies the decision to absorb large capital inflows during the boom as foreign exchange reserves is one of the major sources of the increased room to manoeuvre however these strengths have been insufficient in the face of a strong trade shock the region s economies should therefore seriously think again in the domestic market with regional integration and active production sector policies as engines of growth copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

third world debt and its effects on the british economy a southern view of economic mismanagement in the north when citicorp one of the largest banks in the world announced its decision to make a us 3 billion provision against third world loans in may 1987 almost every commentator agreed that it represented a turning point in the debt crisis it marked the end of the major banks policy of turning a blind eye to the debt crisis after years of unrealistic projections false hopes and promises in the north and with a third world debt already well above us 1 000 billion the banks suddenly began to speak of debt realities see for instance morgan guaranty s world financial markets june july 1987 this realism was a pre condition for overcoming one of the main stumbling blocks to any solution of the crisis namely the reluctance of the main creditor banks to acknowledge the impossibility of recovering the full face value of their ldcs loans

debt and development in historical perspective the external constraints of late industrialisation revisited through south korea and brazil current debates about the role of external finance in development mostly overlook the insights from early development economics that late industrialisation generates a structural tendency to run trade deficits thereby exacerbating rather than relieving external foreign exchange constraints the developmental role of external finance is therefore based on its strategic marginal contribution to relieve such constraints external debt in particular also allows countries to pursue industrial strategies without reliance on foreign direct investment these insights are revisited in this paper as a critical input to both mainstream and heterodox contemporary scholarship on debt and development while the mainstream generally avoids discussion of state led industrial policy the heterodox has converged on a view that developing countries should avoid external finance the contrasting external account histories of south korea and brazil are examined to demonstrate the validity of the classic insights and the contemporary fallacies while the south korean case speaks much to its geopolitical context this does not necessarily refute the principle that post war late development engenders an intensive demand for external finance which must be met if industrialisation strategies are not to be stymied as in the case of brazil no matter how effectively domestic strategies are conceived and implemented

firm growth and efficiency in the banking industry a new test of the efficient structure hypothesis abstract in this paper we propose a new test of the efficient structure es hypothesis which predicts that efficient firms come out ahead in competition and grow as a result our test has significant advantages over existing ones because it is more direct and can jointly test the so called quiet life hypothesis which predicts that in a concentrated market firms do not minimize costs we then apply this test to large banks in japan consistent with the es hypothesis we find that more efficient banks become larger we also find that market concentration reduces banks efficiency which supports the quiet life hypothesis these findings imply that there is an intriguing growth efficiency dynamic throughout banks life cycle although our findings also suggest that the es hypothesis dominates the quiet life hypothesis in terms of economic impact

why the subprime crisis is different a minskyian approach minsky s financial instability model suggests that financial crises can be resolved efficiently with lender of last resort and big government interventions the crisis that began in 2007 hereafter the 2007 crisis has been different it has been more profound and resistant to policy interventions this paper examines why our approach is to expand minsky s balance sheet approach in several ways first we incorporate two factors minsky missed because he built his model in the 1970s the impact of racial exclusion and u s cross border imbalances on u s financial dynamics in addition we draw out the analytical implications of the systematic differences between banks and non banks balance sheets minsky didn t do this but because of the transformation of banking after 1980 these differences have become deeply significant one key effect of so doing is to see that asset liability balances as well as cash flows are crucial in financial dynamics this paper concludes that the 2007 crisis has been so profound and unresponsive to policy intervention for several reasons banks no longer bear as well as originate credit risk banks made exploitative loans to minority borrowers and then generalized these loans as housing prices rose and subprime homeowners and structured investment vehicles became more leveraged than banks copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

expectations the business cycle and the mexican peso crisis the 1994 95 peso crisis did not display characteristics which allow it to be easily captured by traditional crisis models models based on minsky s financial fragility hypothesis offer more persuasive accounts but have been supported by relatively little direct empirical evidence this paper provides such evidence with particular attention being paid to the role of domestic financial liberalisation in the process minsky s hypotheses about the evolution of expectations over the business cycle are tracked using business survey data in addition crisis indicators are constructed reflecting the changing vulnerability of the economy to shocks the findings support a minskyian interpretation of the crisis copyright 2006 oxford university press

from miracle to cronyism explaining the great asian slump explanations are about the only thing not in short supply in the asian crisis for all their diversity they can be collapsed into two meta interpretations reflecting deeper differences in beliefs about rationality and markets those whose world view emphasizes rationality self adjusting markets and market failure as exceptional except when governments introduce distortions tend to see the crisis as the result of rational calculations in a situation of market distorting government interventions and institutional weaknesses in asian economies those whose world view stresses non rationality or a different kind of rationality than that assumed by neoclassical theory routine failure of well working markets and the need for government interventions to modify market outcomes tend to see it as the result of non rational calculations in under regulated financial markets both national and international

shift contagion vulnerability in the mena stock markets as part of a broader financial development reform agenda the middle east and north africa mena countries have successfully expanded and revitalised their stock markets over the last decade whereas previous contributions have investigated efficiency international integration and portfolio diversification opportunities very little is known about these markets vulnerability to external financial crises in this paper we investigate shift contagion to the mena region using a comprehensive battery of econometric tests for a number of different crises episodes the 1997 asian crisis the 1998 russian virus and its brazilian sequel the 2000 turkish collapse the 9 11 turmoil the 2001 argentinean crisis the 2002 enron worldcom scandal and the 2007 09 global financial crisis we found that turkey israel and jordan were the most vulnerable markets over the 1997 2009 period followed by tunisia morocco egypt and lebanon our results also highlight heterogeneous but increasing levels of sensitivity to external financial shocks especially during the recent global financial crisis from a financial point of view this suggests that mena based diversification strategies may be relatively inefficient during periods of global turmoil from an economic point of view our results suggest that stock market development also involves potential destabilisation costs this issue should be acknowledged and addressed by policymakers if these countries are to ensure a smooth transition towards international financial integration

the curious attraction of wagner s law wagner s law of increasing state activity has recently been subjected to intensive use of recondite econometric testing procedures an examination of the relevant articles reveals ignorance both of wagner s definition of state activity and of his insistence that he was not engaged in prediction consequently the omission of public enterprises contained in wagner s definition leads to a model misspecification and the object of testing his hypothesiss remains obscure

partisanship and the path to financial openness the effect of traditional left right economic preferences on countries international financial openness is more subtle than existing studies have recognized the authors investigate the role that partisan politics played in the liberalization of international financial markets within 12 western european democracies from 1960 to 1986 the authors find that right governments tended to be active liberalizers of the capital account they were more likely than left governments to enact liberalizations and liberalizations were especially likely when new right governments entered office left governments typically acquiesced to these changes although less likely to enact liberalizations they were no more likely to impose new restrictions the authors findings are consistent with studies that show how financial integration does not undermine welfare states but is still subject to partisan contention

south korean and taiwanese development and the new institutional economics the publication of books by both alice amsden and robert wade provide an opportune moment to reflect on the study of east asian development after an initial surge of interest beginning in the 1970s the field has reached a plateau and scholars recently have cast a wide net in searching for ways to extend the field in assessing the state of the art regarding the economic development of the east asian newly industrialized countries nics this review will treat three themes first i will argue that the focus on states versus markets is becoming stale and that much of the scholarly interest lies in the politics behind the economics second i argue that political scientists have underexplored the historical origins of korean and taiwanese capitalism and that such attention promises to strengthen both theories and explanations of development third i argue that the international system has been more important in promoting development in east asia than accounts in the first wave have recognized the purpose of this review is to assess the field reveal

a legitimate paradox neo liberal reform and the return of the state in korea this article examines the neo liberal reforms that the kim government implemented in post crisis korea it argues that by embracing the reforms the state paradoxically re legitimised itself in the national political economy the process of enacting the reforms completed the power shift from a collusive state chaebol alliance towards a new alliance based on a more populist social contract but one that nonetheless generally conformed to the tenets of neo liberalism kim and his closest associates identified the malpractices of the chaebols as the main cause of the crisis so reforming the chaebols would be the key to economic recovery combining populism and neo liberalism they drew on support from both domestic and international sources to rein in rather than nurture the chaebols

a time to grow and a time to die growth and mortality of credit unions in new york city 1914 1990 one vision of organizational evolution suggests that old and large organizations become increasingly dominant over their environment a second suggests that as organizations age they become less able to respond to new challenges in this article the authors investigate which of these visions best characterizes the evolution of state chartered credit unions in new york city from 1914 through 1990 by analyzing the effects of organizational age size and population density on rates of organizational failure and growth the authors find evidence that old and small institutions are more likely to fail while young and small organizations have the highest growth rates

testing for weak form efficiency of crude palm oil spot and future markets new evidence from a garch unit root test with multiple structural breaks there is a sizeable literature that tests for weak form efficiency in commodity and energy spot and future prices while many studies now allow for multiple structural breaks to address the criticism that conventional unit root tests have low power to reject the unit root null in the presence of structural change the extant literature overlooks the fact that conventional unit root tests are biased in the presence of conditional heteroscedasticity we apply a recently developed generalized autoregressive conditional heteroscedasticity garch unit root test with multiple structural breaks to crude palm oil spot and future prices and find much more evidence against weak form efficiency than that found using tests that fail to allow for conditional heteroscedasticity our results point to the importance of allowing for heteroscedasticity when testing for efficiency in commodity and energy spot and future prices

international overborrowing a decomposition of credit and currency risks summary the severity of the financial crises enveloping the tiger economies of southeast asia in 1997 came as a surprise to many observers this paper uses a simple fisherian model of the overborrowing syndrome to compare the asian crises of 1997 with earlier overborrowing episodes in mexico and chile while important similarities exist the crises in southeast asia have been exacerbated by the unhedged foreign exchange positions of asian banks these open currency positions not only imposed significant additional losses on the banks following devaluation they also magnified the scale of overborrowing during the cycle s initial boom phase failure to limit the exposure of banks to foreign exchange risk therefore increased the magnitude of the boom bust overborrowing cycle both ex ante and ex post the paper highlights the importance of effective regulation and supervision of capital markets with a focus on limiting the speculative currency positions of banks especially those that form the core of the domestic payments system and therefore enjoy a possibly implicit public guarantee improving the institutional infrastructure of financial supervision is the only effective way of mitigating the macroeconomic costs of overborrowing

testing wagner versus keynes using disaggregated public expenditure data for canada this paper attempts to test wagnerian versus keynesian hypotheses by examining the relationship between national income and total public expenditure as well as its various components for canada during the period 1950 1995 engle and granger s two step cointegration and error correction techniques are employed to test these two hypotheses the results of this study support both the hypotheses when tested with broader aggregate expenditure data i e total government current expenditure ce and total current expenditures on goods and services cegs although the results of this study do not support the existence of any long run relationship between gdp and the disaggregated public expenditure variables they do support the existence of short run causation implying that national income may be causing or caused by a component of the total government current expenditure in the short run

the economics and politics of the structure of public expenditure the paper derives a complete system ofdemand equations for public consumptionexpenditures as the outcome of rationalbehaviour in a model where governmentmaximizes expected electoral support theallocation of expenditures is found todepend not only on the prices of publicservices and total expenditure and tosatisfy the constraints of demand theory which have been the focus of attention ofprevious empirical studies of theallocation of public expenditures but inaddition on the prices of privateconsumption goods the distribution ofvoter incomes and the expected change invoter support from varying the levels ofpublic provision

financial crisis in southeast asia dispelling illusion the minskyan way this paper extends minsky s financial instability hypothesis to the case of the open liberalised economy making it possible to put forward a specifically minskyan account of the road to the financial crisis in southeast asia 1997 1998 the analysis suggests that the threats to growth and employment emanating from the financial sector which minsky identified in the closed economy setting are much intensified in open liberalised developing economies financial liberalisation is an important key factor in this process rival explanations of the crisis are examined and rejected in favour of the extended minskyan explanation the policy implications are derived and discussed copyright 2002 oxford university press

growth acquisition activity and firm size evidence from the united kingdom this paper provides new empirical evidence on the relationship between size growth and acquisition activity of quoted companies in the united kingdom the evidence is based on some two thousand companies and covers the period i960 76 there has been no detailed systematic study for this period the results suggest some revisions to generally accepted views in the area and they have certain implications for industrial and competition policy pursued in the u k and the factors affecting aggregate concentration the paper is arranged as follows section i considers the broader economic context for the study whilst section ii notes some a priori expectations regarding the relationship between size and growth and size and acquisition activity sections iii v present empirical evidence and the last section provides a summary and policy implications of the results

economies of diversification in the us credit union sector summary significant scale economies have been recently cited to rationalize a dramatic growth in the us retail credit union sector over the past few decades in this paper we explore another plausible supply side explanation for the growth of the industry namely economies of diversification we focus on the fact that credit unions differ among themselves in the range of financial services they offer to their members since larger credit unions tend to offer a more diversified financial service menu than credit unions of a smaller size the incentive to grow in size may be fueled not only by present scale economies but also by economies of diversification this paper provides the first robust estimates of such economies of diversification for the credit union sector we estimate a flexible semiparametric smooth coefficient quantile panel data model with correlated effects that is capable of accommodating a four way heterogeneity among credit unions our results indicate the presence of non negligible economies of diversification in the industry we find that as many as 27 91 depending on the type and the cost quantile of diversified credit unions enjoy substantial economies of diversification the cost of most remaining credit unions is invariant to the scope of services we also find overwhelming evidence of increasing returns to scale in the industry

size growth and transnationality among the world s largest banks this essay investigates the relationship between size and growth rate of large international banks and then relates these to the banks degree of transnationality we test two sets of three propositions each the first three propositions are pi that the growth rate of each bank over some period is independent of its size p2 that the variability of growth rates is independent of the banks size and p3 that the banks growth rates in two consecutive periods are independent of each other the second three propositions are p4 that there is no association between size and transnationality p5 that transnationality and growth are independent and p6 that there is no relationship between transnationality and the variability of growth rates the growth referred to is primarily that of assets as a measure of size for the two propositions concerning the variability of growth rates we supplement this measure with one of the market value of the banks equity the results have implications for concentration in internathis paper investigates six propositions relating to gibrat s law of proportionate growth the growth referred to is that of book assets and total market value the results have implications for concentration in international banking and for depositor safety and the social cost of insuring it and provide evidence on economies of scale and on the transnational spread of the industry

can portfolio rebalancing explain the dynamics of equity returns equity flows and exchange rates we explore whether the pattern of international equity returns equity portfolio flows and exchange rate returns are consistent with the hypothesis that unhedged global investors rebalance their portfolio in order to limit their exchange rate exposure when there are 1 relative equity return and 2 exchange rate shocks we also explore whether 3 equity flow shocks influence the exchange rates and relative equity prices in the estimation of the var system we do not impose any causal ordering upon the primitive shocks but instead identify the system based on theoretical priors about the contemporaneous conditional correlations between the three variables international data for the five largest equity markets are consistent with a theory in which equity returns and portfolio rebalancing are an important source of exchange rate dynamics

did fiscal institutions affect wagner s law in italy during 1951 2009 period an empirical analysis in this article we test wagner s assumption of the one sided directional flow moving from economic growth to public spending in italy for the 1951 2009 period we pay particular attention to the impact of certain regime shifts related to changes in italian budget regulations and procedures and the relevance of fiscal institutions to the fiscal performance equation i e the public spending national income nexus the error correction model is estimated to measure short run dynamic effects and the long run equilibrium between the two time series the empirical evidence suggests that wagner s law is supported in regard to policy implications we find that public spending reacted less to positive changes in economic growth when the strengthening of the ministry of finance occurred in 1997 ciampi s reform some sensitivity analyses confirm our empirical evidence

south korea s 1980s financial reforms good bye financial repression maybe hello new institutional restraints abstract south korea s financial reforms in the 1980s have been consistent with high rates of savings and financial deepening but they have not followed liberal reform lines the korean financial system operates under the umbrella of an industrial policy and economic goals have been attained by means of investments in institutions rather than by exclusive reliance on the price mechanism

the asian debt and development crisis of 1997 causes and consequences abstract interpretations of the asian crisis have coalesced around two rival stories the death throes of asian state capitalism story about internal real economy causes and the panic triggering debt deflation in a basically sound but under regulated system story that gives more role to external and financial system causes the paper presents the stories and assesses the evidence the evidence in particular the chronology of the crisis supports the second rather better than the first the paper discusses the interests driving capital account liberalization without a framework of regulation the single most irresponsible act of public authorities in the whole crisis us and uk financial firms allied with their treasuries and with the imf the wto and the oecd saw themselves at a chronic disadvantage in the asian system of long term relationships and patient capital this alliance supported by segments of asian political and financial elites achieved dramatic domestic financial sector liberalization and capital account opening in asia over the 1990s setting up the conditions for crisis paradoxically the crisis may be looked back upon not as the triumph of benign globalization and neoliberal economic doctrine but as the beginning of its end

the law of proportionate effect and oecd bank sectors the paper investigates the growth dynamics of the bank sectors in the oecd area over the period 1985 1994 and examines whether the structural financial reforms of the late 1980s have affected their growth path based on a test of gibrat s law of proportionate effect it is found that the 1985 89 period was characterized by size convergence implying that smaller bank sectors were expanding more rapidly however in the 1990 1994 period the pattern reversed to proportionate growth the analysis of the determinants of bank market growth reveals that macroeconomic growth operational bank efficiency credit quality and capitalization are the main drivers of bank industry growth

developing countries changing nature of financial integration and new forms of external vulnerability the brazilian experience this article argues using the example of brazil that the changing nature of developing and emerging countries decs financial integration has created new forms of external vulnerability causing large and volatile capital and exchange rate movements despite sound fundamentals and a substantial reduction in its traditional external vulnerabilities the brazilian real has been one of the most volatile currencies over recent years the article argues that this has been the result of the surging exposure of foreign investors in an increasingly complex set of very short term domestic currency assets following a minskyan analysis we demonstrate that the changing nature of brazil s external vulnerability confirms both the inherent and endogenous instability of international capital flows and decs subordinate role in the international financial system we conclude with policy recommendations to reduce decs external vulnerability sustainably

growth profits and foreign ownership in the brazilian banking industry the deregulation of the financial markets and their progressive globalization has favoured the internationalization of banking moreover during the international financial crisis the presence of

capital market imperfections and financialization of real sectors in emerging markets private investment and cash flow relationship revisited summary the paper analyzes the impacts of cash flow from multiple investments in real and financial sectors on the new fixed investment spending of real sector firms the empirical results based on the euler equation approach and semi annual firm level data from two major emerging markets mexico and turkey suggest that profits and rates of returns from fixed and financial assets have differential effects on fixed investment spending of real sector firms accordingly increasing availability and accessibility of alternative investment opportunities in financial markets can become instrumental in channeling real sector savings to short term financial investments instead of long term fixed capital formation and thus lead to deindustrialization

the costs of coupling the global crisis and the indian economy the view that the indian economy would be less adversely affected by the global economic crisis because of limited integration and other inherent strengths has proved to be wrong the economic boom in india that preceded the current downturn was dependent upon greater global integration in three ways greater reliance on exports particularly of services increased dependence on capital inflows especially of the short term variety and the role these played in underpinning a domestic credit fuelled consumption and investment boom these in turn made the growth process more vulnerable to internally and externally generated crises as is now becoming clear

credibility and reputation building in the developmental state a model with east asian applications abstract we use a game theoretic model to analyze the role of credibility reputation and investment coordination in a developmental state our model focuses on why a soft state serving narrow social groups so often obtains in less developed countries and under what conditions a hard or developmental state can emerge the model highlights the dilemma that although state and private sector alike may want economic growth both must simultaneously invest to achieve it but the equilibrium outcome analogous to the prisoner s dilemma is investment by neither even when initial conditions are favorable and a state is potentially developmental with the genuine capability to elicit private sector investment this may not materialize and an equilibrium of low or no investment will prevail to avoid this deadlock and foster growth the successful developmental state must demonstrate commitment by promoting its developmental credentials through a process of reputation building a consequent incentive to act tough together with seeming advantages of authoritarianism in implementing the developmental state may help to explain why it is often associated with an authoritarian political system

iceland s rise fall stabilisation and beyond iceland is an unusually pure example of the dynamics that blocked regulation and caused financial fragility across the developed world for 20 years this essay describes the statist and corporatist political economy of the country as it soared from near the bottom of the western european income hierarchy at the end of the world war ii to up near the top by the 1980s it illustrates how a group of neoliberal politicians and allied civil servants drove through selective deregulation and privatisation in the 1990s and 2000s in the space created for newly privatised banks icelandic financiers grew the banks and linked private equity firms through mergers and acquisitions abroad to the point where by 2007 tiny iceland supported three banks in the world s biggest 300 banks with assets eight times the gdp second highest in the world after switzerland as profits from these overseas operations were partly redistributed back to iceland the economy boomed in the grip of super minsky processes the government the banks and the media interpreted the boom as testimony to the validity of neoliberal policies and went out of their way to hide increasing financial fragility from view preventing a negative or self correcting policy feedback loop the accident waiting to happen happened in the wake of the lehman collapse in september 2008 the essay charts the zigzags of the government s response and the citizens response and discusses the prospects for a resumption of growth on a more sustainable basis it suggests that iceland illustrates in miniature the ratcheting down of mass living standards underway across the western world now that the cushion of debt has been removed even as financiers and others in the top few percentiles of national income distributions increase their share of national income but economic institutions and politics matter in iceland the large devaluation spread the cut in a relatively apolitical way the government let the banks go bust rather than bail them out at taxpayers expense it imposed capital controls on outflows and it used fiscal transfers to protect the bottom half of the population from disproportionate cuts

three and a half cycles of mania panic and asymmetric crash east asia and latin america compared this paper argues that despite some significant differences the 1982 debt crisis the 1994 mexican crisis and the 1997 east asian crisis share the common characteristic that over lending and over borrowing are basically endogenous market failures of over liquid and under regulated financial markets along the lines described by kindleberger s manias panics and crashes although these crashes have tended to be asymmetric as the largest international lenders have emerged relatively intact the paper concludes with a discussion of brazil s increasing vulnerability to a sudden collapse of confidence and withdrawal of finance which indicates the probability of another impending crisis

a new methodology linking concentration dynamics to current and steady state profits examining korean industrial policy during take off abstract we model the dynamics of industrial structure and market power using korean manufacturing data during the take off period 1978 82 structure conduct performance scp methodologies have been criticized for using accounting data and because a few superior firms may have greater shares and greater profits both are argued to present possible spurious correlations between concentration and profits this paper follows earlier work which shows that market structure responds to observed accounting profits as if these were accurate indices of real profits and not as if leading firms are perceived to have unmatchable advantages the methodological contribution of this model is a new latent variable for steady state profits derived from the speed of structural adjustment long run profits are identified by the hypothesis that structural adjustment will be more rapid when industries are farther from steady state levels we analyze the long run profits latent variable finding strong support for this hypothesis the speed of adjustment is greater for positive and negative deviations from steady state structure we show that the profits and structural adjustment relationship is non monotone the scp criticisms above are based on spurious correlations which are monotone in profits and structure positing spurious correlations which are at the same time monotone in structure and non monotone in structural adjustment seems less plausible than accepting the scp results which are consistent with both our analysis also is new in that it is the first direct econometric analysis of korean industrial policy during its take off years we note that in korea unlike elsewhere industrial policy was hypothesized to lead to concentration and market power in the popular press and by professional economists ours is the first direct econometric analysis of this hypothesis and we find it supported

a credit score system for socially responsible lending ethical banking microfinance institutions or certain credit cooperatives among others grant socially responsible loans this paper presents a credit score system for them the model evaluates social and financial aspects of the borrower the financial aspects are evaluated under the conventional banking framework by analysing accounting statements and financial projections the social aspects try to quantify the loan impact on the achievement of millennium development goals such as employment education environment health or community impact the social credit score model should incorporate the lender s know how and should also be coherent with its mission this is done using multi criteria decision making mcdm the paper illustrates a real case a loan application by a social entrepreneur presented to a socially responsible lender the decision support system not only produces a score but also reveals strengths and weaknesses of the application

a logistic growth theory of public expenditures a study of five countries over 100 years this paper offers a new theory and empirical testing of long term trends of public expenditures for five countries while wagner s law would imply an exponential growth process of the ratio between public expenditures and national income g y the law should be rejected both on theoretical and empirical grounds because it disregards the role of ever increasing distortionary taxation however under some conditions the combination of wagner s law and the pigou s conjecture that the excess burden of taxation constrains the growth of public expenditures can be captured by a non linear first order differential equation the equation is the verhulst s logistic originally invented to model malthusian predictions on population growth the integration of a verhulst equation generates an s shaped curve this analytical framework combines intuitions from a welfare economics and a public choice perspective and potentially offers a new research strategy on the dynamics of government expenditures we offer preliminary econometric estimates on long run trends around 1870 1990 of g y in u s u k france germany italy these estimates confirm a pattern of similar trajectories in spite of different national parameters and suggest that the logistic view of growth of government is consistent with observed data

from global imbalances to global reorganisations 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

revisiting economic development in post war taiwan the dynamic process of geographical industrialization taiwan s post war economic growth has been spectacular and has attracted divergent even contrasting explanations from the students of economic development while neo classicists interpret taiwan s miracle as a model of a free market economy the statists put government policy as their main emphasis however neither the neo liberalists nor the statists take the phenomena of uneven development very seriously by ignoring the process of geographical industrialization both discourses are not able to reveal the dynamic rhythm and more importantly the diversity and possibility of capitalist development this paper tackles the issue by unraveling the divergent regional industrial trajectories and the resulting geographical and social embeddedness in post war taiwan au taiwan le developpement economique d apres guerre a ete mirobolant d ou des explications divergentes de la part des etudiants du developpement economique alors que les neoclassicistes considerent le miracle taiwanais comme un modele type

public expenditure growth in greece and portugal wagner s law and beyond in the tradition of wagner s law this study examines the relationship between aggregate income and public expenditures in greece and portugal during the years 1958 85 unlike more conventional specifications our analysis focuses on the movement of different componenets of public expenditures permanent income relative prices stabilization policy and socio political factors emerge as thomain determinants of public expenditures while the results reveal significant difference in responses to these determinants across components of expenditures and between the two countries

capital inflows and the real exchange rate a comparative study of asia and latin america the nexus of real exchange rate rer and capital inflows is examined through a comparative analysis of the experiences of emerging market economies in asian and latin america during the period 1985 2000 it is found that the degree of appreciation in rer associated with capital inflow is uniformly much higher in latin american countries compared to their asian counterparts despite the fact that the latter experienced far greater foreign capital inflows relative to the size of the economy the econometric evidence suggests that both the composition of capital flows and differences in the degree of response of rer to capital flows matter in explaining these contrasting experiences while rer appreciation is a phenomenon predominantly associated with other non fdi forms of capital inflows ocfw a given level of ocfw brings about a far greater degree of appreciation of the real exchange rate in latin america where the importance of these flows in total capital inflow is also far greater on the policy front asian countries seem to have used fiscal contraction and nominal exchange rate adjustment more effectively to cushion the rer against the appreciation pressure of capital inflows there is however no evidence to suggest that sterilized intervention can generate a lasting impact on the real exchange rate

the asian crisis and the shaping of proper economies the latter half of the 1990s saw a new international agenda develop the strengthening of the international financial system through the globalisation of standards and codes of best practice the author calls for critical reflection on this normalisation of free market capitalism and its global enforcement through a comprehensive system of economic standardisation and surveillance to this end michel foucault s analysis of liberalism is shown to be highly relevant

a new approach for determining exchange rate level preferences in research on the political economy of exchange rates a good understanding of who will endorse and who will oppose certain exchange rate policies is central to understanding how actual exchange rate policies are made and how the global exchange rate system changes over time since existing classifications of exchange rate level preferences have several shortcomings this article proposes a new and more nuanced strategy for identifying preferences on exchange rate valuation this approach takes into account the complex interrelationship between exchange rate and monetary policy and the effects of these policies on balance sheets in addition the approach accounts for the dynamics of preference formation and change comparative case studies of currency crises in hong kong south korea thailand and taiwan show that considering actors vulnerabilities to exchange rate and interest rate changes enhances understanding of their exchange rate level preferences the case studies also indicate that societal preferences affect policy outcomes exchange rate stability was maintained in countries where private actors vulnerabilities to depreciation were high however when pressure intensified exchange rates were subsequently depreciated in countries where vulnerabilities to a monetary tightening exceeded the potential costs of depreciation

evaluating the performance of us credit unions credit unions are small cooperative not for profit institutions which distinguishes them from other financial intermediaries in this study we conduct a performance evaluation of credit unions the criteria respect the unique organizational and institutional features of credit unions without losing sight of the fact that they must compete with other financial intermediaries we use nonparametric nonstochastic techniques to measure performance and we use parametric stochastic techniques to attribute performance variation to features of credit unions and their operating environment our sample consists of two thirds of all active credit unions in 1990