Financial Crises and Recession in the Global Economy, Second Edition

Financial Crises and Recession in the Global Economy, Second Edition

Roy E. Allen

This timely and authoritative book explains the rise and fall of economies in Asia, Central America and Europe since 1980 and discusses these crises in the context of continuing economic globalization. This updated and fully revised edition includes a detailed account of the Mexican crisis of 1994–95, the Japanese crisis which has worsened in the late 1990s and the Asian crisis which emerged in 1997. Professor Allen discusses the impact of new uses and forms of money, and new financial flows such as electronic monies and offshore financial markets.

Chapter 5: International Adjustments and Political Responses

Roy E. Allen

Subjects: economics and finance, financial economics and regulation, international economics


Page 145  5. International Adjustments and Political Responses  As per the more personal notes in the Introduction, the author originally decided to write this book due to his dissatisfaction with the typical textbooks in international  economics, macroeconomics, and the related subjects that he teaches. These textbooks do not present the major structural changes and recent events in the global  economy to his satisfaction; insufficient attention is given to financial market globalization, new trade patterns, new forms and uses of money and changes in its  circulation, monetary wealth processes, and recent financial crises and recessions. Hopefully in Chapters 1–4 the author has been able to enhance the reader's  understanding of these topics.  It is not only the conventional economic theory regarding these topics with which the author is dissatisfied. He also finds (and dare he say) that the major ‘players’ who  work very closely with the evolving markets — the Group of Seven (G7), central banks, the World Bank, the International Monetary Fund (IMF), various national  policymakers, etc. — also seem somewhat naïve or at least too dismissive about these particular topics.  For example, in a review of the first edition of this book, a member of the Federal Reserve Board concluded that the author ‘grossly overstates [that financial  globalization] is the principle cause and explanation of various events that Allen exaggeratedly refers to as ‘‘crises”’.1 This comment was made in full light of the ‘lost  decade’ and 50 percent decline in standard of living during the 1980s in much...

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