The Global Divide: Inequality in the world economy Marc Lee

Inequality is a pressing issue in the global economy. This new report by the Canadian Centre for Policy Alternatives finds that inequality is extremely large and growing, both between and within countries. The World Bank and IMF have been significant contributors to the rise in global inequality. global_divide (Download the full text in PDF format)

Globalization of Capital and Terms of Trade Movements Prabhat Patnaik

This paper argues that the "liberalization" of exchange rate regimes has an independent, powerful and separate effect on the terms of trade which has its origin in the currency markets and not the goods markets. This effect arises from the secular tendency of the real values of third world currencies to fall, relative to the dominant currency in a regime of "liberalized exchange rates". globalization_capital (Download the full text in PDF format)

On Some Common Macroeconomic Fallacies Prabhat Patnaik

Fallacy 1: The interest rate in the Economy is High because the Fiscal Deficit is high The interest rate is the return on a particular asset, namely a debt instrument. It must be determined therefore as part of a stock equilibrium. The fiscal deficit is a flow concept. To say that the interest rate is determined by the size of the fiscal deficit is tantamount to saying that the price of a stock is determined by a flow, which is plain illogical. But, it may be argued, while the fiscal deficit may not determine the interest rate, it certainly affects…

Argentina : A cautionary tale from South America Jayati Ghosh

The comprehensive mess in Argentina today almost defies belief. At the turn of the year, the financial and economic collapse was near total, with banks closed, the state of the currency (and even its very existence) in some doubt, rapidly increasing unemployment, decline in almost all public services and shortages of liquidity that threatened access to basic food and necessary goods for survival for much of the population. cautionary_tale (Download the full text in PDF format)

Post-Crisis Korea James Crotty & Kang-Kook Lee

This paper evaluates the neoliberal economic restructuring process implemented in Korea following the 1997 Asian financial crisis. A detailed analysis of the macro economy, labor markets, financial markets, and nonfinancial firms in Korea in the past three and one-half years shows that neoliberal restructuring has created a vicious cycle in which a perpetually weak financial sector fails to provide the capital needed for real sector growth, investment and financial robustness, while real sector financial fragility continuously weakens financial firms. post_crisis_korea (Download the full text in PDF format)