China’s Capital Flight Syndrome C.P. Chandrasekhar

China, now one of the world’s two largest nations measured by gross domestic product (GDP), is displa­ying a strange malady. A sudden and large outflow of capital from the country is resulting in a sharp fall in its reserves. Going by International Monetary Fund (IMF) statistics, between the quarter ending June 2014 and the one ending June 2016, China’s foreign exchange reserves fell by $752 billion, from $4.1 trillion to $3.3 trillion. According to recent reports, reserves had fallen further to $3.1 trillion by the end of October 2016. This collapse in reserves due to an outflow of capital is…

No Method in this Confusion C.P. Chandrasekhar

Reserve Bank of India Governor Raghuram Rajan faces a challenge greater than that confronting his peers. Having taken office when the task of dealing with the global crisis had ostensibly been done with, he cannot appeal to circumstances to defend actions that go contradictory to his professed faith. Developed country finance ministers and central bankers did that through the crisis—borrowing to spend while swearing by fiscal consolidation or pumping liquidity into the system while claiming to be committed to a monetary policy framework that makes reining in inflation its prime target. Rajan took office when many claimed the crisis was…

Is Global Finance Finally Shrinking? Jayati Ghosh

It is obvious that the recent boom in global capitalism had witnessed massive over-extension of finance. What has been described as “financialisation” reflected not only the ever-greater penetration of finance capital into more activities of the real economy and involvement in critical markets such as those for commodity futures that affect traded prices of food and fuel, but also huge and volatile movements of capital across national borders. By 2007, global stocks of financial assets (both equity and debt stocks) amounted to $206 trillion.  This meant that financial assets were more than 4 times the maximal estimate of GDP in…

The Endless Eurozone Crisis, Where Do We Stand? A Classical-Kaleckian Overview Sergio Cesaratto

This paper reviews the main causes of the Euro Zone financial crisis and argues that the prevailing crisis resolution philosophy resembles the original deflationary Euro-bias. Endless_Eurozone_Crisis (Download the full text in PDF format) (This article was originally published in The Quaderni del Dipartimento di Economia Politica e Statistica (Department of Economics and Statistics Working Papers) in February 2013.)