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Accumulation and Crisis, Theory of See Crisis Theory Agent Choice Index Accumulation and crisis, theory of see Bank of England, 119, 133, 135, 142 Crisis theory Banking Review, 111 Agent choice Banks generally, 27 bonus-driven incentive system, use of see consciousness of ignorance, 46, 47 Bonus-driven incentive system macrotheory, relationship to, 39–49 capital requirements see Capital path dependency, 26, 42–44, 161, requirements 282, 312 deregulation of, 30–31 residual hypothesis, 45 excessive leverage, 32 subjectivist and objectivist approaches failures, number of, 113–114 to, 40–41 hiring practices, 156 Aglietta, Michel, 279 large banks, growth of, 113–116 Aglietta and Breton study, 279 Baran, Paul, 10, 204 AIG, 131, 136, 141 Baran and Sweezy study, 10, 204, 236 Am I a Liberal?, 310, 315 Basle Committee, 121 Amromin, G., 27 Basle Rules, 132, 135 Amromin and Sharpe study, 27 Bear Stearns Animal spirits, 50, 53, 54 generally, 119, 120, 136 Annuities, 123 compensation practices of, 153 Armey, Dick, 364 Beaver, W., 20 Arrighi, Giovanni, 279 Bebchuk, Cohen and Spamann study, Arrighi and Silver study, 279 153 Asian Development Bank, 392 Bebchuk, Lucian, 153 Asymmetric information Becker, J., 146 generally, 14, 33, 253 Becker and Morgenson study, 146 New Keynesian theory, in, 175–189 Behaviorists, 14–15 passim Berle, Adolf, 206 Athenaeum, 308 Berle and Means study, 206 Austerity policies Bernstein, J., 262 generally, 1–3, 10, 263, 269, 274 Black, Fischer, 24 European resistance to, 383 Blankfein, L., 139 public employees as target, 377 Blinder, Allan, 59 South Korea, in see South Korean Block, F., 63 crisis Bloomberg, 124 U.S. deficit crisis and see Deficit crisis Boeing, 372 Bolton, Anthony, 137 Bach, G.L., 330 Bond market, 124, 284 Bank for International Settlements, 30, 138 Bonus-driven incentive system Bank of America generally, 2–3, 120, 131–132, generally, 119, 142, 163 151–152 compensation practices of, 153 boom-bust cycles, role in, 160–162 413 James Crotty - 9781784719029 Downloaded from Elgar Online at 09/27/2021 10:11:32AM via free access 414 Capitalism, Macroeconomics and Reality cumulative total return analysis of Bretton Woods system, 1, 62, 260, 272, bank stocks, 155 348 destructive competition, effect of, 164 Britain’s Industrial Future, 320–322 effect of diminishing profits, 153 Brittan, S., 389 excess supply of rainmakers, effect Brown-Collier, E., 308 of, 156, 165–168 Buffett, Warren, 159 Great Financial Crisis, role in, Bureau of Labor Statistics, 380, 398 151–152 Burger, Albert, 335 growth in popularity of, 156–158 Bush, George H. W., 364, 368 growth of bonuses as diminishing Bush, George W., 364, 365, 366, profits, 153–154 368–372 inability to restrain, 162–165 Business Week, 115, 209, 267, 293 large investment banks specifically, Busts see Booms and busts in, 153–155 mutual fund investors, effect of, 163 Camdessus, Michel, 407–408 oligopoly pricing power, effect of, Camerer, C., 14 160, 162 Camerer and Lowenstein study, 14 primacy of bonuses, 153–155 Can Lloyd George Do It?, 325 rents, rainmaker premiums as, Canada, 375–376 156–158 Capital, 73–99 passim short-term horizons of investors as Capital asset pricing model factor, 164 assumptions used to construct, 24–25 Wall Street firms, 153–154 econometric testing of, 21–22 Booms and busts Keynes-Minsky versus, 24–29 generally, 21, 24–32, 56, 96–98, 129, “market portfolio,” 21 130–133, 137–138, 138–165 “no arbitrage” assumption, 23 passim, 140, 182–193, 396–403 unrealistic assumptions used to conflict between capital and labor as create, 17 leading to, 331 Capital deepening, 221–225, 233, endogenous boom-bust cycles, 229–230 235–238 expansion, role of credit in, 94–96 Capital requirements inflation as factor, 187–188, 343–345, banks, for, 30–31, 121, 132, 134–143 352–353 collateralized debt obligations, for, Keynes-Minsky-Marx theory, in, 134 161–162 Value at Risk, 30–31, 121–122, South Korean crisis and, 396–397, 138–139 400–405 Capital widening, 221–223, 232, speculative inflation during, 187–188 235–236, 238 telecom bust, 297 Carvalho, Fernando, 45, 48, 61 Borenzstein, E., 389 Case-Shiller index, 143 Borenzstein and Lee study, 389 Center on Budget and Policy Priorities, Bosworth, Barry, 208, 210 369, 379 Bosworth and Collins study, 400 Chandler, Alfred, 251, 273 Bowles, Gordon and Weisskopf study, 260 Chang, H.-J., 389 Bowles, S., 259 Chang, Park and Yoo study, 391 Bowring, J., 251 Chicago Fed, 117 Boyer, Robert, 279 China, 262 Brazil, 301, 344 Citigroup Brenner, Robert, 259, 277 generally, 117, 119, 135, 137, 140, 146 Breton, Regis, 279 compensation practices of, 153 James Crotty - 9781784719029 Downloaded from Elgar Online at 09/27/2021 10:11:32AM via free access Index 415 Claessens, S., 403 Keynes-Minsky-Marx theory, in, 8 Clark, John Maurice, 250, 251, 252 nonfinancial corporations, neoliberal Clarke, S., 236, 237 globalization’s effect on, Class conflict theory of macropolicy 276–277, 289 generally, 329, 352–353 Coercive competition, 264–265, 275 balance of payments as factor, Cohen, Alma, 153 346–352 Coherence, micro- and macro-foundations concept of cycle, role of, 334–341 of, 39–40, 60–64 cyclical behavior of factor shares, Collateralized debt obligations, 33–34, 335–341 118–125, 132–137 exclusive reliance on monetary and Collier, B., 308 fiscal policy, end of, 351–352 Collins, C., 400 foreign exchange system, role of, Commons, John R., 315 348–349 Competition full employment as goal, 332–333, generally see Competition in financial 335–338, 342–343 markets goals of state as factor, 329–334 coercive competition, 264–265, 275 gold, role of, 348–349 cooperation, relation between harmony-conflict dialectic, 330 competition and, 256 inflation, role of, 343–345, 352–353 corespective competition see international and political affairs as Corespective competition factor, 346–352 destructive competition, 164, 247– Keynesian position distinguished, 332 251, 254–256, 264–267, labor problems, 338–340 274–279, 282, 289, 292–297 maximization of profits as primary dialectical process, as, 226 goal, 330 fraternal and fratricidal modes of New Economic Policy, 347–352 competition, 222–223, 227, pluralism, 331 230, 233 political-social and economic factors Keynes’ view distinguished, 342–343 anarchic competition, 316–320 productivity, cyclical movements in, atomistic competition, rejection 338–340 of, 316–320 profits/wages ratio, 335–338 disequilibrium competitive racial income differentials, 341 processes, 310–312, 318 stable reserve army, 342–343 regulated competition, 317 technological forces, 338–339 perfect competition, Neoclassical unemployment, 342–343, 353 model of, 249 US dollar, role of, 348–349, 352 Competition in financial markets wage and price controls, 340, generally, 109–112 344–345, 351–353 bidding clubs, 115 wage struggle, 343–345, 352–353 bond market, 124 wars and, 347–348, 353 brokerage services, profitability of, 114 Clinton, Bill, 364, 366, 368, 379 collusive behavior, 115–116 Clower, R., 42 consolidation in sector, 113–114 Coddington, A., 39 corespective competition see Coerced investment Corespective competition generally, 266 derivatives, 117–126 investment theory, in reformulation fee structures, 114–115 of, 220–221, 223–224, financial deepening, 113 226–227, 230, 234–235 Group of Ten survey, 114 James Crotty - 9781784719029 Downloaded from Elgar Online at 09/27/2021 10:11:32AM via free access 416 Capitalism, Macroeconomics and Reality hedge funds see Hedge funds natural oligopolies, in, 250–253, herd behavior, 124, 286, 312 255–256 high growth industry, financial firms nonfinancial corporations, among, as, 112–113 274–275, 280, 281 high returns, pressure to achieve, Corporate raiders, 284–285 123–124 Corporate tax rate, 372, 374 higher risk leading to higher profits, Countrywide, 140 116–124 Credit default swaps see Derivatives initial public offerings, 114–115, 120 Credit derivatives see Derivatives institutional investor incentives as Credit rating agencies, 132 increasing risk taking, 122 Crisis theory large banks, growth of, 113–116 generally, 7, 72–73, 100–102 low interest rates due to Central abstract forms of crisis, 75, 77–90 Banks’ intervention, 116 barter, 78 mergers and acquisitions, 114–115, capitalist crises, generally, 82–83, 120, 267 90–91 noninterest income, 117–122 circulation, generally, 73–76 OTC products, 124 contract-credit system, 91–92, 96–100 paradox of high profit rates and contract economy, 83–90 intense competition, 109–112, credit-accumulation nexus, 92 126 credit system, development of, 91–92 rate of expansion of financial firms, depth and duration of downturn, 112–113 factors in, 100 Conditional macroeconomic coherence, disequilibrium aspects of simple 39–40, 60–64 commodity production, 80–81 Conditional stability expansion, role of credit in, 94–96 generally, 39–40, 48–49, 53–54, 57, 59 falling rate of profit and oversensitive expectation and confidence formation contract credit system as trigger, as contributing to 49–60, 49–60 98–100, 101–102 institutional foundation of, 60–64 fragility or over-sensitivity of system, uncertainty and, 39–40, 49–64 84–104 passim Confidence “functions” of money, 77 expectation and confidence formation gross rate of profit defined, 94 see Expectation and confidence hoard, money as, 80, 85 formation interest rate as eroding net profit rate, neoclassical agents and, 49–50 97 optimism distinguished, 46 laws of motion of capitalism, 90–91 risk distinguished, 46 money as means of circulation, 78–83 variable, as, 27–29 money as means of payment, 83–90 Conflation, 8, 197–198, 201–203, money as measure of value, 81–82 205–206, 210–212 net rate
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