International Political Economy : Thomas Oatley - Book2lookThe global financial crisis and the sovereign debt crises that ravaged the European Union between and have thrust the international monetary and financial systems to the center of global political economy. The international monetary and financial systems provide the infrastructure for the global economy. The international monetary system - a system for exchanging national currencies at low cost at relatively stable rates and a balance-of-payments adjustment process - makes international trade possible. The international financial system - a network of private and public financial institutions - intermediates transactions between savers and borrowers who reside in different countries. These transactions provide short-term credit for international trade and longer-term finance for cross-border investment. Derivatives markets enable participants in the global economy to manage risk arising from transacting in multiple jurisdictions with multiple national currencies. Without these essential structures, there would be very little international trade and even less cross-border investment.
Download International Political Economy The Struggle for Power and Wealth Pdf
Debates in International Political Economy, 2nd Edition
What factors generate financial fragility in open economies? Existing research assumes that the development of these conditions is more likely to emerge under some configurations of domestic economic and political attributes. We examine the development of financial fragility through the ontological lens of the new interdependence approach, which assumes that global factors can be as important as local factors in generating outcomes. We analyze global financial conditions from to and argue that contemporary global finance is an oscillating system that generates boom and bust capital flow cycles. The phases of this cycle are a consequence of the scale of US net borrowing on global markets: when the United States is a large net importer of foreign capital, other economies struggle to attract foreign capital and are substantially less likely to develop fragile financial positions; when US net capital imports fall, other economies receive an abundance of foreign capital, and financial fragility becomes more likely. In contrast, we find little evidence that cross-national variation in political institutions or financial systems explains why fragility develops, although some regional interdependencies are evident.