Trump Versus the Rest Prabhat Patnaik

Donald Trump’s leaving the G-7 summit without budging an iota on protectionism is indicative of the disunity among the leading capitalist countries on the strategy to overcome the capitalist crisis. Trump has decided that the U.S. would go its own way, by enlarging the fiscal deficit, not just for giving tax concessions to the corporates, which would have little demand-stimulating effect anyway, but also for increasing government expenditure which would have this effect, and at the same time by protecting the domestic market. These two strands of Trump’s strategy have to go together. In fact in the absence of protectionism,…

Walmart’s gamble and what it means for India C. P. Chandrasekhar

Much of the writing on Walmart’s purchase of a dominant 77 per cent stake in Flipkart, touted for long as India’s answer to Amazon, is focused on its size. At $16 billion, of which $14 billion goes to buy up the stakes of investors such as SoftBank from Japan and Naspers from South Africa, it is reportedly the biggest acquisition in the global e-commerce area, and way larger than $3.3 billion that Walmart paid for US web retailer Jet.com in a deal considered the largest purchase of a US e-commerce startup. With some existing shareholders exiting, Walmart now shares ownership…

The return of the Oil Threat C. P. Chandrasekhar

On the morning of April 24, the price of Brent crude, the global benchmark for oil prices, rose above $75 a barrel, touching its highest level since 2014 and signalling the return of an era of high oil prices. That is a $30 per barrel or 66 per cent rise from the previous low of around 10 months ago. As expected, this has made oil importers nervous. But, despite the benefits it would bring US shale producers, even President Donald Trump is rattled. In one more of his infamous early morning tweets he declared: “Looks like OPEC is at it…

G7 Policies and their implications for Global Stability and Growth Andrew Cornford

Comments prepared for the debate sponsored by the South Centre on Revolution Required The Ticking Time Bombs of the G7 Model, book authored by Hervé Hannoun and Peter Dittus,    Palais des Nations, United Nations, Geneva, 13 April 2018 For reasons explained at length by the authors the principal focus of Revolution Required (RR) is the monetary policy in the Advanced Economies (AE), which has been the main response to the Global Financial Crisis (GFC). This response the authors view as leading to an unsustainable increase in debt levels in the medium term and to investment which may not be viable…

The return of a Housing Bubble C. P. Chandrasekhar and Jayati Ghosh

Even while optimistic assessments of growth trends in the global economy proliferate, concerns that the unwinding of inflated asset price markets could abort the recovery are being expressed. Interestingly, there appears to be a substantial degree of agreement on the cause for such uncertainty, which is an excessive dependence on monetary measures in the form of quantitative easing and the associated extremely low interest rate environment to address the post-crisis recession. That lever was not the most effective from the point of view of lifting growth. While the early resort to fiscal stimuli delivered a sharp recovery, the retreat from…

Managing Monetary Policy and Financial Supervision in Argentina: Historical Analysis and Present Neoliberal Challenges – A Personal Account Alejandro Vanoli

This article traces the context in which this author served Argentina as both the chairman of the Central Bank of Argentina and former chairman of Securities and Exchange Commission of Argentina. As described, the efforts necessary for a country such as Argentina to achieve and maintain financial sovereignty are almost as great as the forces opposing such a possibility. While focusing on the specific case of Argentina and pertaining to a specific time in its history, this article offers insights that hopefully can lead to a better understanding of the global forces that condition the management of national economies in…

The collapse in developing country exports C. P. Chandrasekhar and Jayati Ghosh

If there has been one big change in the nature of the global economy in the second decade of this century, it is in global trade. In the first decade of this century, especially in the period 2002-08, cross-border trade grew much more rapidly than total world output, and the integration of countries through greater exchange of goods and services essentially became the primary engine of growth. It is true that the explosion of financial activity that has become such a prominent feature of contemporary capitalism also added substantially to income growth – and indeed generated the bubbles that were…

Trump’s Trade War C. P. Chandrasekhar

After a year of huffing and puffing, President Donald Trump has launched, since January this year, what some are terming a trade war—fought in scattered industrial and selected locations. It started with quotas and tariffs on solar panel and washing machine imports, but then moved menacingly to steel and aluminium. Tariffs on these two products have been imposed under a WTO clause relating to imports that threaten national security, even while Trump’s rhetoric refers to competition from "cheap metal that is subsidized by foreign countries", which amounts to a completely different ‘dumping’ charge. With the tariff hike on steel at…

The True Face of the Global Recovery C. P. Chandrasekhar and Jayati Ghosh

The global economy, the soothsayers would have it, is riding the back of a recovery. Growth is seen as having consolidated in the US, picked up remarkably in Europe, and returned, after a minor blip, in China and India. Encouraged by these signs, the IMF in January estimated global growth in 2017 at 3.7 per cent, which was marginally above previous projections, and forecast growth at 3.8 per cent in 2018 and 2019. A key driver here is the effect that the Trump administration’s tax cuts and promise of increases in infrastructure spending are expected to have on demand and…