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Begin New Search Topic Global Financial Crisis Political Geography Global Focus

1. Shifting into Digital Services: Does a Crisis Matter and for Who?

Author:
Erik van der Marel
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
How do trade patterns change after an external shock such as an economic crisis, and is this shift structural? This paper uses a Difference-in-Difference (DID) approach to investigate whether services trade became more digital after the Global Financial Crisis (GFC) in 2008. It finds that the GFC formed an independent break from the previous period that turned services trade to become more digital – although there are signs that this somewhat already happened before 2008. Software-intense services such as R&D services, information services, computer services and charges for Intellectual Property Rights (IPR) saw on average a 6 percent higher increase in global exports compared to other non-digital sectors post-2008. Countries with higher internet usage and with already comparative advantage in these sectors saw this higher increase in digital trade. More striking is that in particular upper-middle income countries and countries with high manufacturing activity saw the sharpest shift into digital services trade after the GFC. These significant outcomes forecast a direction into which patterns of services trade are likely to turn after the current economic crisis resulting from COVID-19.
Topic:
International Political Economy, International Trade and Finance, Digital Economy, Global Financial Crisis, Exports, and Digital Policy
Political Geography:
Global Focus

2. The Great Lockdown: Impact of the COVID-19 Pandemic on the Global Economy

Author:
Damian Wnukowski and Marek Wasinski
Publication Date:
04-2020
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
The coronavirus pandemic and efforts to suppress it (the Great Lockdown) will lead to the collapse of the global economy. In the short term, the reduction in production and consumption in the countries most affected by the pandemic will lead to a global recession. In the long run, the crisis may result in a partial retreat from globalisation, higher indebtedness, and narrowing the differences in economic potential between the EU and the U.S., and China. A positive side effect may be the acceleration of the development of the digital economy, including the services market.
Topic:
European Union, Economy, Global Financial Crisis, Coronavirus, and Pandemic
Political Geography:
China, Europe, North America, Global Focus, and United States of America

3. The Diffusion Of Protest Following The 2007–2008 Global Crash

Author:
Cristina Flesher Fominaya
Publication Date:
09-2019
Content Type:
Research Paper
Institution:
Brown Journal of World Affairs
Abstract:
In the wake of the 2008 global financial crisis, hundreds of protests spread across the world. Remarkably, despite the diversity of polities, regimes, and socioeconomic status across countries, these protests share two core demands to a varying degree: greater, more meaningful, or “real” democracy; and greater economic justice. While these are two distinct demands, they cannot be sepa- rated from each other. Although initially (and understandably) the protests were interpreted in direct relation to the global economic crash, especially in those countries hit hardest by the crisis and austerity politics, it soon became clear that the protests also reflected a crisis of representative democracy.
Topic:
Economics, Financial Crisis, Protests, and Global Financial Crisis
Political Geography:
Global Focus

4. The Diffusion of Protest following the 2007-2008 Global Crash

Author:
Cristina Flesher Fominaya
Publication Date:
09-2019
Content Type:
Journal Article
Journal:
Brown Journal of World Affairs
Institution:
Brown Journal of World Affairs
Abstract:
In the wake of the 2008 global financial crisis, hundreds of protests spread across the world. Remarkably, despite the diversity of polities, regimes, and socioeconomic status across countries, these protests share two core demands to a varying degree: greater, more meaningful, or “real” democracy; and greater economic justice. While these are two distinct demands, they cannot be sepa- rated from each other. Although initially (and understandably) the protests were interpreted in direct relation to the global economic crash, especially in those countries hit hardest by the crisis and austerity politics, it soon became clear that the protests also reflected a crisis of representative democracy. Financial crises provoke legitimation crises when elites are perceived as having caused and benefited from them. Activists in the global wave of protests following 2008 worked to channel the grievances relating to these crises and to transform the public’s interpretive frameworks of them by contesting dominant narratives about their causes and solutions. Protesters challenged the idea that economic crises were the result of abstract, global capitalist forces and instead placed the blame squarely on economic and political elites. In so doing, they argued that the origin of the crisis was political; austerity policies were not inevitable, but rather the result of collusion between financial and political elites who not only failed to protect citizens against the worst effect of the crisis but also forced them to assume the losses of private capital speculation. While in Europe these protests can best be characterized as pro-democracy and anti-austerity, other movements such as the Arab Spring or Occupy Wall Street might better be characterized as pro-democracy and economic justice. The protests revealed an interesting paradox: despite a strong decline in trust and satisfaction with representative politics and political parties, the belief in and support for democ- racy as a value and the demand for its regeneration were core characteristics of protester demands.
Topic:
History, Social Movement, Inequality, Protests, Global Financial Crisis, and Elites
Political Geography:
Global Focus

5. Classifying Exchange Rate Regimes: 15 Years Later

Author:
Eduardo Levy-Yeyati and Federico Sturzenegger
Publication Date:
06-2016
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Levy Yeyati and Sturzenegger (2001, 2003, 2005) proposed an exchange rate regime classification based on cluster analysis to group countries according to the relative volatility of exchange rates and reserves, thereby shifting the focus from a de jure to de facto approach in the empirical analysis of exchange rate policy. This note extends the classification through 2014 and broadens the country sample, increasing the number of classified country-year observations from 3335 to 5616. Based on this extension, the note documents the main stylized facts in the 2000s, including the behavior of exchange rate policy around the global financial crisis, and the prevalence of floating regimes.
Topic:
Economy, Global Political Economy, Global Financial Crisis, and Exchange Rate Policy
Political Geography:
Global Focus and Global Markets

6. Fiscal Sustainability: Conceptual, Institutional, and Policy Issues

Author:
Marek Dabrowski
Publication Date:
08-2016
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
'Since 2008, the world economy has been facing the consequences of the global financial crisis. As a result, many economic policy paradigms have been revised, and this process is far from complete. The policy area, which needs a fundamental rethinking (especially in advanced economies), relates to the role of public finance and fiscal policy in ensuring economic growth and financial stability. The primary task will be to develop a new analytical approach and detailed indicators, which are necessary to provide a correct diagnosis and effective recommendations.' What are the “safe” levels of budget deficit and public debt during “normal” or “good” times? Is there a single norm of fiscal safety?
Topic:
Debt, Financial Crisis, Finance, Global Financial Crisis, Macroeconomics, Fiscal Policy, and Deficit
Political Geography:
Europe, Global Focus, and Global Markets

7. The Explosive Growth of the ABCP Market Between 2004 and 2007: A 'Search for Yield' Story

Author:
Photis Lysandrou and Mimoza Shabani
Publication Date:
01-2016
Content Type:
Working Paper
Institution:
City Political Economy Research Centre (CITYPERC), University of London
Abstract:
The years immediately preceding the financial crisis of 2007 witnessed an explosive growth in the supplies both of the long term securities issued by the shadow banking entities, the ABSs and CDOs, and of the short term securities issued by these entities, notably ABCP. While it is widely accepted that the search for yield was the major driving force behind ABS and CDO growth, the same is not true of the ABCP market where other factors such as regulatory arbitrage on the part of banks or the safety and liquidity concerns of institutional investors are seen as having been the more important growth driving force. This paper argues that the search for yield did play a crucial role in ABCP growth between 2004 and 2007. To back up this argument, the paper points to four close correlations that were peculiar to this particular three year span: (i) that between ABCP growth and the federal funds rate and the rate on ABCP; (ii) that between ABCP growth and the growth of US MMMF asset holdings; (iii) that between ABCP growth and the changes in the geographical and functional breakdown of the institutions supplying ABCP; (iv) and, finally, that between ABCP growth and the changes in the programme breakdown of the ABCP market.
Topic:
Economic Growth, Global Financial Crisis, Investment, Banking, and Asset Backed Commercial Paper
Political Geography:
Global Focus

8. Elasticity and Discipline in the Global Swap Network

Author:
Perry Mehrling
Publication Date:
11-2015
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper sketches the outlines of the new international monetary system that has emerged in the aftermath of the global financial crisis. At the center of the system, a network of central bank swaps between the six major central banks serves as an elastic backstop for private foreign exchange operations. Farther out on the periphery, a further network of central bank swaps operates to economize on scarce reserves of the major currencies. Meanwhile, in the private foreign exchange market, basis swaps are emerging as the central location where liquidity is explicitly priced, inside the bounds set by central bank swaps.
Topic:
Markets, Finance, Global Financial Crisis, Central Bank, Banking, and Liquidity
Political Geography:
Global Focus

9. Too much saving... or too few financing channels?

Author:
Anton Brender and Florence Pisani
Publication Date:
04-2015
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The global financial crisis led to widespread dislocation. Understanding the forces that led to such a crisis is no easy matter. After briefly looking back at the mechanics underlying the recent episode of international transfers of saving, this paper looks at how the resulting global imbalances started to unwind and why helping promote the building of new financing channels should now be governments’ priority.
Topic:
Government, Financial Crisis, Global Financial Crisis, and Saving
Political Geography:
Global Focus

10. Estimating U.S. Cross-Border Securities Positions: New Data and New Methods

Author:
Carol C. Bertaut
Publication Date:
08-2014
Content Type:
Commentary and Analysis
Institution:
Board of Governors of the Federal Reserve System
Abstract:
The role of capital flows in the buildup to the global financial crisis and the potential vulnerabilities posed by capital flows to emerging market economies highlight the importance of reliable and timely measures of cross-border investment activity to better monitor developments as they unfold. We present new monthly estimates of U.S. cross-border securities investment, combining information from detailed annual Treasury International Capital (TIC) surveys with new information from the TIC form SLT. We also show how changes in the new monthly data can be decomposed into flows, estimated valuation changes, and a residual "gap". These decompositions can provide a richer and timelier view of developments in both foreign portfolio investment in the U.S. and U.S. portfolio investment abroad than available from transactions data or survey data alone. Data on cross-border holdings through December 2013, by country, are available for download; we also provide advice on how to construct estimates going forward. These data can be combined with the existing Bertaut-Tryon monthly estimates of securities holdings (now updated through 2011) to generate consistent monthly time series of positions.
Topic:
Emerging Markets, Markets, Global Financial Crisis, Capital Flows, and Investment
Political Geography:
Global Focus