Föhrenbergkreis Finanzwirtschaft

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Archive for 10. Oktober 2015

Pro-Growth is Not Pro-Poor

Posted by hkarner - 10. Oktober 2015

Photo of Steven J. Klees

Steven J. Klees

Steven J. Klees, an economist, is Professor of International Education Policy at the University of Maryland and a co-editor of The World Bank and Education: Critiques and Alternatives.

OCT 9, 2015, Project Syndicate

COLLEGE PARK, MARYLAND – Zia Qureshi recently argued that economic growth is the way out of inequality – and, by extension, poverty. In Qureshi’s view, more direct redistributive policies are too “controversial and divisive.” In fact, there is ample reason to believe that the world will never grow its way out of inequality and poverty, and that redistribution is our only hope for greater social justice.

“Pro-growth is pro-poor” has been the informal slogan of the World Bank and the International Monetary Fund for decades, resulting in 35 years of neoliberal economic policies known as the “Washington Consensus.” These policies comprised the structural adjustment programs (SAPs) of the 1980s and 1990s, when developing countries were forced to cut social programs, privatize public services, deregulate industries, eliminate trade protection, and make their labor markets more “flexible” (a euphemism for making it easier to fire workers). These programs yielded modest growth at best; what they did succeed in boosting was poverty, inequality, and social protest. Den Rest des Beitrags lesen »

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The Hidden Debt Burden of Emerging Markets

Posted by hkarner - 10. Oktober 2015

Photo of Carmen Reinhart

Carmen Reinhart

Carmen Reinhart is Professor of the International Financial System at Harvard University’s Kennedy School of Government.

OCT 9, 2015, Project Syndicate

LIMA – As central bankers and finance ministers from around the globe gather for the International Monetary Fund’s annual meetings here in Peru, the emerging world is rife with symptoms of increasing economic vulnerability. Gone are the days when IMF meetings were monopolized by the problems of the advanced economies struggling to recover from the 2008 financial crisis. Now, the discussion has shifted back toward emerging economies, which face the risk of financial crises of their own.

While no two financial crises are identical, all tend to share some telltale symptoms: a significant slowdown in economic growth and exports, the unwinding of asset-price booms, growing current-account and fiscal deficits, rising leverage, and a reduction or outright reversal in capital inflows. To varying degrees, emerging economies are now exhibiting all of them. Den Rest des Beitrags lesen »

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Explaining money creation by commercial banks: Five analogies for public education

Posted by hkarner - 10. Oktober 2015

Ib Ravn1 [Aarhus University, Denmark]
Copyright: Ib Ravn, 2015

Educators and economists concerned with monetary reform face the extraordinary challenge of explaining to the public and its elected representatives not only what a reformed system would look like, but also how the current system works. Centrally, the point that in a modern economy money is largely created by commercial banks, as explained by the Bank of England recently (McLeay, Radia & Thomas, 2014b), is often met with incredulity: “What do you mean, created?” This paper introduces five easy-to-grasp analogies that educators and reformers may use to convey key money-creation concepts to a lay audience. The analogies offered include (1) money as patches in an expandable patchwork quilt that covers a nation’s real assets, (2) the money supply as water in a bathtub with a faucet and a drain, (3) money understood as debt in a model economy run by schoolchildren, (4) the misleading concept of a bank “loan” explained by reference to gold that a London goldsmith could have lent, and (5) the money-creating capacity of bankers’ clearing systems illustrated by the example of neighbors working for each other without money.

Full text:Ravn71

Thanks to H.F.

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