DOCSLIB.ORG

New Age Globalization Meaning and Metaphors

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
New Age Globalization Meaning and Metaphors Copyrighted material - 9781137293411 New Age Globalization Meaning and Metaphors Aqueil Ahmad Copyrighted material - 9781137293411 Copyrighted material - 9781137293411 new age globalization Copyright © Aqueil Ahmad, 2013. All rights reserved. First published in 2013 by PALGRAVE MACMILLAN® in the United States—a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN: 978-1-137-29341-1 Library of Congress Cataloging-in-Publication Data Ahmad, Aqueil. New age globalization : meaning and metaphors / Aqueil Ahmad. pages cm ISBN 978-1-137-29341-1 (alk. paper) 1. Globalization. I. Title. JZ1318.A433 2013 303.48’2—dc23 2012051223 A catalogue record of the book is available from the British Library. Design by Scribe Inc. First edition: July 2013 10 9 8 7 6 5 4 3 2 1 Copyrighted material - 9781137293411 Copyrighted material - 9781137293411 Contents Introduction: The Meaning and Metaphors of New Age Globalization 1 1 Conceptual Framework for Exploring New Age Globalization 17 2 Global Population and Demographic Trends 33 3 The Global Economy (or Economic Globalization) 61 4 The Global Ecological/Environmental System 103 5 The Global Political System (or Political Globalization) 127 6 Global Conflicts 155 7 Globalization of Culture (or Cultural Globalization) 169 8 Globalization of Knowledge, Science, and Technology: The Past, Present, and Future 179 9 World Religions 223 Notes 247 Bibliography 271 Index 289 Copyrighted material - 9781137293411 Copyrighted material - 9781137293411 Copyrighted material - 9781137293411 Copyrighted material - 9781137293411 Introduction The Meaning and Metaphors of New Age Globalization his book examines the interdependent and interconnected global Tsociety, or globalization, in terms of its structural and functional or process characteristics. For its value implications, it is dedicated to the peo- ple—the men, women, and children as citizens of the world—who make and unmake global society and are most affected by it. Whether always spe- cifically stated or not, the underlying concern of this work is global social change for human welfare on this planet, which is either aided or abated by human action itself. The term global society refers to the architecture of this world order, while globalization is treated as its process dimension. Global or “global- ized” structures refer to the institutions, agencies, and organizations whose missions, mandates, networks, and even the workforce, with its values and attitudes, are essentially global rather than local in nature. Such struc- tures are legion in the contemporary world society. Structures such as the United Nations (UN), the European Union (EU), the World Bank, the International Monetary Fund (IMF), other international agencies (both governmental and nongovernmental), regional economic zones, and mul- tinational financial, manufacturing, sales, and service corporations imme- diately come to mind in this context. What these institutions do by way of their outreach activities, which affect billions of people, multiple resources, and diverse cultures and environments, are assumed to be the process aspects of global society (or globalization) as a large interconnected and interdependent system with a variety of subsystems within it as explained in this book. Copyrighted material - 9781137293411 Copyrighted material - 9781137293411 2 NEW AGE GLOBALIZATION Sociologists of the structural-functional school and systems theorists in general have used for decades the systemic analogy to explain the inher- ent interdependencies in complex organizations as well as within national societies. To the best of my knowledge it has not been used in the expla- nation of what may be called a global society, the global social system, or globalization per se for obvious reasons. To define and discuss national societies as continuous, interdependent, and interconnected systems in terms of their structures and corresponding processes itself poses enor- mous analytical difficulties because of their complexities and amorphous natures. These difficulties compound when the unit of analysis is the world as a whole. Such conceptualization would be unthinkable in the pre- Sputnik or “preglobalization age” when the notion of our planet as a con- tinuous system was beyond our common perception and consciousness, despite the fact that in some important ways it has been in the making for a long time. Intraplanetary connections are easier to comprehend in the new age globalization, with advanced and ever-faster means of communication, travel, and transfer of people, products, and services from one part of the world to the others. It is in this context that global structures and the pro- cesses that connect them are seen as a large but imperfect system; globaliza- tion is merely a heuristic device. This is done to help simplify and enhance our understanding of unity within the diversity of a very complex, newly emerged or emerging reality defined simply as “globalization” in common language and literature. A quick check at the Davis Library of the University of North Carolina at Chapel Hill delivered more than 1,100 relevant titles covering 96 pages under the term “globalization” compared to only 20 pages of 32 overlap- ping entries for “global society.” I believe this would be true in other uni- versity libraries in the United States as well. Unless otherwise delineated, the complementary terms of global society and globalization are often used interchangeably in the following discussion, as they appear to be used in the Davis Library archives as well. A lot has changed since my book Exploring Globalization: Structures and Processes, Impacts, and Implications was published in the middle of 2010. President Obama has been reelected as the forty-fourth president of the United States against seemingly insurmountable odds. French President Nicolas Sarkozy was defeated by François Hollande to form the second Socialist government in France after François Mitterrand’s long tenure from 1981 to 1995. In a monumental Supreme Court decision on June 28, 2012, Chief Justice John Roberts changed ranks with his conservative colleagues on the bench to uphold the Obama’s universal health care plan for all Americans. Enrique Pena Nieto was elected as the president of Mex- ico as his country struggled to fight drug-related violence but held steady Copyrighted material - 9781137293411 Copyrighted material - 9781137293411 INTRODUCTION 3 economic growth. The EU remained intact despite continued economic chaos and political and social instability in half a dozen European coun- tries, including Greece, Spain, Italy, Portugal, and others. As a true measure of global interdependence, economic difficulties in the Euro Zone affected the economies west and east of Europe—North America, China, India, and beyond—and vice versa. In his 2012 book, The Price of Inequality: How Today’s Divided Society Endangers Our Future, Nobel Laureate Joseph Stiglitz warned of the grow- ing inequality in America as the single most destructive aspect of capitalism and the failure of rational market theories in general to correct economic imbalances in the Western world, particularly the Unites States of America. One characteristic stands out in the new age globalization more than any other: that is the universally experienced ever-faster pace of change in the industrialized and the industrializing countries alike. Interestingly it is the very nature of globalization itself—systemic interconnections, and consequently interdependence—that largely explains why much of the world spins around simultaneously, sometimes a couple of steps for- ward, at other times a couple of steps backward. On the global political scene these gyrations were, or are, no more visible than in the so-called Arab Spring in Tunisia, Libya, Yemen, and Egypt, where dictators were toppled in a dramatic domino effect to be replaced by political instabil- ity and unrest. These global revolutions of rising expectations presumably helped spawn the Occupy Wall Street protests all across the United States that dramatized the highly skewed distribution of wealth and consequently political power between the haves and have-nots, the 1 percent and the 99 percent of the common folks, echoing Stiglitz’s warning about the price of inequality in America. The origins and spread of these revolutions can be explained reason- ably well by my favorite conceptual categories of powerful reactions to powerlessness of the weak and of global consciousness among the masses. These psychosocial forces are further stimulated and strengthened by the emerging global invisible college (or colleges) of international scientific communities that is mutually informed and is encouraged to develop and disseminate inventions like television, the Internet, and mobile phones— the technologies of instant communication that become the technologies of revolutions of rising expectations “that produce the agents of change through the process of change itself,” to reenact the eloquent phraseology of
Load more

Recommended publications
  • The Contemporary Crisis in Globalization and Its Impact on Latin America with Special Reference to the Caribbean Region of Latin America
    The Contemporary Crisis in Globalization and its impact on Latin America with special reference to the Caribbean region of Latin America Jessica Byron Introduction This contribution evolved out of a panel discussion that was organized around a series of questions concerning the development and evolu- tion of globalization since the 1990s; the potential consequences of the current political crises for the future of globalization processes; and the major implications and lessons on the way forward for Latin American and Caribbean economies and societies. The following sections first make reference to major features of globalization and to the earlier discourse on its implications, which remain relevant to our analyses of the contemporary tendencies. Thereafter, I discuss the consequences of these new developments for countries and regions in the South. The final section examines the outlook specifically for small, developing economies in the Greater Caribbean sub-region of Latin America and the Caribbean. I. The development and evolution of globalization since the 1990s The discussion draws from three definitions and observations about globalization. Mittelman (1997:3) describes it as “a worldwide phenomenon […] a coalescence of varied transnational processes and domestic structures, allowing the economy, politics, culture and ideology of one country to penetrate another. The chain of causality runs from the spatial reorganization of production to inter- national trade, to the integration of production and to the integration of financial markets […] driven by changing modes of competition, 97 The Contemporary Crisis in Globalization and its impact on Latin America with special reference to the Caribbean region of Latin America globalization compresses the time and space aspects of social relations […] (it is) a market-induced, not policy-led process”.
    [Show full text]
  • Megatrends the Deglobalization Myth(S)
    Vanguard Research: Megatrends The deglobalization myth(s) About the Megatrends series Megatrends have accompanied humankind throughout history. From the Neolithic Revolution to the Information Age, innovation has been the catalyst for profound socioeconomic, cultural, and political transformation. The term “Megatrends” was popularized by author John Naisbitt, who was interested in the transformative forces that have a major impact on both businesses and societies, and thus the potential to change all areas of our personal and professional lives. Vanguard’s “Megatrends” is a research effort that investigates fundamental shifts in the global economic landscape that are likely to affect the financial services industry and broader society. A megatrend may bring market growth or destroy it, increase competition or add barriers to entry, and create threats or uncover opportunities. Exploring the long-term nature of massive shifts in technology, demographics, and globalization can help us better understand how such forces may shape future markets, individuals, and the investing landscape in the years ahead. Vanguard Investment Strategy Group’s Global Economics Team From left to right: Joseph Davis, Ph.D., Global Chief Economist; Roger A. Aliaga-Díaz, Ph.D., Americas Chief Economist; Peter Westaway, Ph.D., Europe Chief Economist; Qian Wang, Ph.D., Asia-Pacific Chief Economist Americas: Jonathan Lemco, Ph.D.; Andrew J. Patterson, CFA; Joshua M. Hirt, CFA; Maximilian Wieland; Asawari Sathe, M.Sc.; Adam J. Schickling, CFA Europe: Shaan Raithatha, CFA; Roxane Spitznagel; Griffin Tory Asia-Pacific: Beatrice Yeo, CFA; Alexis Gray, M.Sc. 2 Megatrend The deglobalization myth(s): Why slowing trade growth shouldn’t concern investors ■ While economists and policymakers have historically emphasized globalization’s benefits, the consensus is fracturing.
    [Show full text]
  • First It Was the 2008 Global Financial Crisis. Then the Arab Spring. Then
    A SYMPOSIUM OF VIEWS Future Surprises That Could Shock the World irst it was the 2008 global financial crisis. Then the Arab Spring. Then Brexit. International conventional Fwisdom always seems unaware of the big changes about to unfold. There are in the present few facts about the future. Ten years ago, for example, who would have predicted surprise developments such as negative interest rates, the potential breakup of the European Union, the Donald Trump/Bernie Sanders effect, drones, the use of driverless cars, the rise of ISIS, the myriad uses of artificial intelligence and big data, U.S. energy independence, the emergence of the Zika virus, or the rate at which robots are taking away jobs. TIE asked more than fifty top thinkers to look ahead ten years at what outside-the-box developments THE MAGAZINE OF INTERNATIONAL ECONOMIC POLICY could shock the world. 220 I Street, N.E., Suite 200 Washington, D.C. 20002 Phone: 202-861-0791 Fax: 202-861-0790 www.international-economy.com [email protected] 8 THE INTERNATIONAL ECONOMY SUMMER 2016 The breakup of the European Union. The Trump-Brexit The greater phenomenon will concentration of have destroyed power in the offices of presidents and the “common good.” policymakers. GARY CLYDE HUFBAUER W. BOWMAN CUTTER Reginald Jones Senior Fellow, Peterson Institute for Senior Fellow and Director, Economic Policy Initiative, International Economics Roosevelt Institute ot for me to speculate about drones or clones. Both “Things fell apart. The centre did not hold. will deliver surprises in the decade ahead, along Mere anarchy was loosed upon the world…” Nwith artificial intelligence, robots, magic materials, —William Butler Yeats (with apologies) and cures for cancer.
    [Show full text]
  • The Cost of Doing Nothing: the Price of Inaction in Response to the COVID-19 Crisis
    The cost of doing nothing: The price of inaction in response to the COVID-19 crisis Version: 10 July 2020 Authors: Dirk-Jan Omtzigt, Head, Humanitarian Financing Strategy and Analysis Unit, OCHA Ashley Pople, University of Oxford and consultant for OCHA Introduction The global crisis induced by the COVID-19 pandemic is unprecedented in nature. Emerging as a health crisis, the pandemic has become a threat to global prosperity and stability. Keeping in mind the fundamental uncertainty about the trajectory of the pandemic and the economic forecasts, there is common consensus that the global economy will experience the deepest recession since the Great Depression and the broadest collapse in per capita income since 1870. As of 24 June, the IMF projects a -4.9 percent contraction in global GDP in 2020, followed by a protracted and uneven recovery due to the persistence of the shock. The extent to which these downturns are synchronised and spill over across borders makes this crisis relatively unique. Domestically, the OECD and the G20 countries have responded with a large stimulus package estimated at over $11 trillion (approximately 10% of world GDP). In comparison, the cost of protecting the most vulnerable 10 percent of the world from the worst primary and secondary impacts of COVID-19 today is an additional $90 billion – less than 1 percent of the current stimulus package. Relative to high-income countries, “whatever it takes” is a fundamentally different concept in low-income countries due to limited forex reserves, central bank dollar swap lines and fiscal space. Strong multilateral coordination is required to meet the shortfall in financing and support the strengthening of health, education and other social safety nets – now, rather than later.
    [Show full text]
  • Why Was Japan Hit So Hard by the Global Financial Crisis?
    ADBI Working Paper Series Why was Japan Hit So Hard by the Global Financial Crisis? Masahiro Kawai and Shinji Takagi No. 153 October 2009 Asian Development Bank Institute ADBI Working Paper 153 Kawai and Takagi Masahiro Kawai is the dean of the Asian Development Bank Institute. Shinji Takagi is a professor, Graduate School of Economics, Osaka University, Osaka, Japan. This is a revised version of the paper presented at the Samuel Hsieh Memorial Conference, hosted by the Chung-Hua Institution for Economic Research, Taipei,China 9–10 July 2009. The authors are thankful to Ainslie Smith for her editorial work. The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of ADBI, the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms. The Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI’s working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. Suggested citation: Kawai, M., and S. Takagi. 2009. Why was Japan Hit So Hard by the Global Financial Crisis? ADBI Working Paper 153.
    [Show full text]
  • Coping with the Global Economic Crisis: a Challenge to Technical Vocational Education and Training (TVET) in Nigeria (Pp
    An International Multidisciplinary Journal, Ethiopia Vol. 6 (3), Serial No. 26, July, 2012 ISSN 1994-9057 (Print) ISSN 2070--0083 (Online) DOI: http://dx.doi.org/10.4314/afrrev.v6i3.12 Coping with the Global Economic Crisis: A Challenge to Technical Vocational Education and Training (TVET) in Nigeria (Pp. 165-175) Ekpo, Aloysius B. - Department of Vocational Education, University of Uyo, Uyo, Akwa Ibom State, Nigeria Phone: 234-8029527712 E-mail: emmezik‘yahoo.com Onweh, Vincent Eze - Department of Vocational Education, University of Uyo, Uyo, Akwa Ibom State, Nigeria Phone: 234-8037463345 Abstract There is rapid transformation of the economics of the developed countries of the world-in the last two decades. This has resulted in global economic crisis affecting both the developing and underdeveloped countries of the world. The erratic changes have been creating new demands for more adaptable, multi- skilled and creative labour. To meet the demands, it has become necessary to reduce the gap between academic education and vocational education; to develop competence-based curriculum development mechanism; to strengthen the co-operation between education authorities, government/employment organizations as well as industries, to decentralize the delivery system and to involve employers more in the process of TVET. This paper is an attempt to x-ray the Nigerian situation in this time of Global Economic Crisis and the Challenge to TVET in Nigeria. Key words: TVET, global economy, globalization Copyright © IAARR 2012: www.afrrevjo.net 165 Indexed African Journals Online: www.ajol.info Vol. 6 (3) Serial No. 26, July, 2012. Pp. 165-175 Introduction The notion of crisis as adopted in this work is as defined by the Merriam Webster‘s Collegiate Dictionary, eleventh edition of 2003; where it states thus‖- crisis is an unstable or crucial time or state of affairs in which a decisive change is impending; especially one with the distinct possibility of a highly undesirable outcome.
    [Show full text]
  • A Proposal to Prevent Offshoring: an Analysis of the Latest Anti-Offshoring Proposals James Emilcar
    Journal of International Business and Law Volume 11 | Issue 1 Article 10 2012 A Proposal to Prevent Offshoring: An Analysis of the Latest Anti-Offshoring Proposals James Emilcar Follow this and additional works at: http://scholarlycommons.law.hofstra.edu/jibl Part of the Law Commons Recommended Citation Emilcar, James (2012) "A Proposal to Prevent Offshoring: An Analysis of the Latest Anti-Offshoring Proposals," Journal of International Business and Law: Vol. 11: Iss. 1, Article 10. Available at: http://scholarlycommons.law.hofstra.edu/jibl/vol11/iss1/10 This Notes & Student Works is brought to you for free and open access by Scholarly Commons at Hofstra Law. It has been accepted for inclusion in Journal of International Business and Law by an authorized administrator of Scholarly Commons at Hofstra Law. For more information, please contact [email protected]. Emilcar: A Proposal to Prevent Offshoring: An Analysis of the Latest Anti- A PROPOSAL TO PREVENT OFFSHORING: AN ANALYSIS OF THE LATEST ANTI-OFFSHORING PROPOSALS James Emilcar* I. INTRODUCTION Many companies are increasingly becoming aware of their ability to reduce costs significantly by offshoring personnel.' Indeed, a concern over the issue of offshoring has swept the country.' Many Americans are concerned that this business practice results in American job-loss.3 Offshoring-that is, moving jobs to a lower wage location-is a com- mon effect of globalization.4 Globalization is a process by which companies of different nations integrate into the international economy. 5 This process is driven by international trade and investment and fueled by innovative technological developments. 6 The concept of globalization provokes much debate and controversy for the American populace.
    [Show full text]
  • Global Climate Change, the Political Economy, and Development a Case Study: the Kingdom of Tonga
    California State University, Monterey Bay Digital Commons @ CSUMB Capstone Projects and Master's Theses Capstone Projects and Master's Theses 5-2018 Global Climate Change, The Political Economy, and Development A Case Study: The Kingdom of Tonga Demonte Simon California State University, Monterey Bay Follow this and additional works at: https://digitalcommons.csumb.edu/caps_thes_all Part of the Agricultural and Resource Economics Commons, Growth and Development Commons, and the Health Economics Commons Recommended Citation Simon, Demonte, "Global Climate Change, The Political Economy, and Development A Case Study: The Kingdom of Tonga" (2018). Capstone Projects and Master's Theses. 328. https://digitalcommons.csumb.edu/caps_thes_all/328 This Capstone Project (Open Access) is brought to you for free and open access by the Capstone Projects and Master's Theses at Digital Commons @ CSUMB. It has been accepted for inclusion in Capstone Projects and Master's Theses by an authorized administrator of Digital Commons @ CSUMB. For more information, please contact [email protected]. Global Climate Change, The Political Economy, and Development A Case Study: The Kingdom of Tonga Demonte Simon 30 April, 2018 California State University, Monterey Bay GLOBALIZED DISPARITIES 2 Globalization has created prosperity and growth for many of the countries across the globe especially in the Global North, which experience some of the greatest benefits of globalization while being the least affected by its negative impacts. Small island nation states tend to experience these negative impacts of globalization more often than the states that are fueling these trends. Globalization has many meanings, but the most agreed upon definition is the increasing interaction between people and corporations due to advances in transportation and communication technology.
    [Show full text]
  • Trade and the Global Recession
    NBER WORKING PAPER SERIES TRADE AND THE GLOBAL RECESSION Jonathan Eaton Samuel Kortum Brent Neiman John Romalis Working Paper 16666 http://www.nber.org/papers/w16666 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 January 2011 We thank Costas Arkolakis, Christian Broda, Lorenzo Caliendo, Marty Eichenbaum, Chang-Tai Hsieh, Erik Hurst, Anil Kashyap, and Ralph Ossa as well as participants at numerous seminars for helpful comments. George Alessandria, Tim Kehoe, Andrei Levchenko, Kanda Naknoi, Denis Novy, Andy Rose, Jonathan Vogel, and Kei-Mu Yi gave excellent discussions. Max Perez Leon, Fernando Parro, and Kelsey Moser provided outstanding research assistance. This research was funded in part by the Neubauer Family Foundation and the Charles E. Merrill Faculty Research Fund at the University of Chicago Booth School of Business. Eaton and Kortum gratefully acknowledge the support of the National Science Foundation under grant number SES-0820338. Neiman gratefully acknowledges the support of the National Science Foundation under grant number 1061954. The Appendix that accompanies the paper can be found on the authors' web pages. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer- reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2011 by Jonathan Eaton, Samuel Kortum, Brent Neiman, and John Romalis. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source.
    [Show full text]
  • Offshoring and the Internationalization of Employment: a Challenge
    Are job losses and the degradation of working conditions in the developed world due to globalization and the offshoring of jobs? Contrary to popular beliefs and fears, most economic analysis evaluating the long-term and global implications of the internationalization of employment does not support this view. Yet for workers who have been displaced, a positive global and long-term impact does not remove their immediate loss. Offshoring and The Proceedings of the Third Annecy Symposium, which took place in April 2005, discuss this paradox: globalization may have enhanced the overall well-being of the Internationalization those countries that have participated, and globally reduced poverty, but it looks more and more like a monster that devours jobs as there are few mechanisms to compensate those that have suffered. The book analyses trends and patterns in of Employment the internationalization of employment, looks at losers and winners, and proposes new policies of compensation. The latter are based on rights and international la- A challenge for a fair globalization? bour standards, and on a new effort to build an effective employment adjustment system that accompanies a fair globalization. Proceedings Peter Auer, Geneviève Besse and Dominique Méda of the France/ILO s y m p o s i u m A n n e c y 2 0 0 5 International Institute for Labour Studies Offshoring and the internationalization of employment France/ILO symposium 2005 ILO ( ISBN 92-9014-783-0 Liberté • Égalité • Fraternité RÉPUBLIQUE FRANÇAISE Ministère de l’emploi, de la cohésion
    [Show full text]
  • Chapter I the Global Economic Crisis: Causes and Transmission
    Chapter I The global economic crisis: causes and transmission Impact, response and recovery The recent financial and economic crisis—the worst since the Great Depression of the 1930s—originated in the United States and quickly spread through multiple channels to other industrialized countries, low- and middle-income countries, as well as economies in transition. The result has been the still- unfolding global financial, economic and social crises now often referred to as the “Great Recession”. The global economy contracted by 2 per cent in 2009 in sharp contrast to the several preceding years of high growth in excess of 3 per cent annually (United Nations, 2010c; 2011). While many rich countries experienced economic contraction, the rate of economic growth in developing countries slowed significantly to 2.4 per cent for 2009. In 2009, 52 countries experienced declines in per capita income. In the same year, output in economies in transition as a group contracted sharply by 6.7 per cent as Russian output declined by almost 8 per cent. Also in 2009, economies in Latin America and the Caribbean contracted by 2 per cent, as Mexican output fell by 6.5 per cent. Western Asia was the other developing part of the world experiencing negative growth (United Nations, 2011). Global trade volumes fell from the end of 2008 through the first half of 2009 as a result of declining imports by developed countries, especially in the United States which accounted for 15 per cent of the global total (United Nations, 2009a; 2010b). At the height of the crisis, between July 2008 and April 2009, the value of imports of the European Union, Japan and the United States plummeted by almost 40 per cent and triggered a worldwide collapse in international trade.7 Despite the gradual recovery of the past two years, the value of imports of the three largest developed economies was still about 25 per cent below pre-crisis peaks by August 2010.
    [Show full text]
  • RESPONDING to the CRISIS Joseph E. Stiglitz 1
    RESPONDING TO THE CRISIS1 Joseph E. Stiglitz2 1 The financial crisis that began in August 2007 turned into a recession in late 2008, and is now well on its way to being the longest and deepest downturn since the Great Depression. There is a growing consensus that at certain critical times it has not been well managed. This chapter deals with the four critical problems: (a) monetary stimulation; (b) fiscal policy; (c) dealing with the foreclosure problem; and (d) rescuing failing financial institutions It was written in August, 2008, before the Lehmann Brothers bankruptcy, before the massive bank bailout, before Obama’s stimulus package and his foreclosure program. As this chapter goes to press, some eight months later, much has changed—but remarkably, much has stayed the same. I have added at the end of three of the sections a brief “April 2009” postscript. Monetary Policy Much of modern economic policy discussions begin with the premise that monetary policy should bear the brunt of the responsibility for stabilization. Fiscal policy, it has been argued, moves too slowly. By the time that a tax cut or stimulus package is enacted and implemented, the economy is likely to have turned around. But under current circumstances, monetary stimulus is likely to be ineffective, for several reasons, and even if it were effective, it is not obvious that it is desirable. Over recent years, monetary policy has worked mainly by encouraging a housing bubble, which has sustained a consumption boom. If monetary policy works through the same 2 channels, it is not clear that that is desirable—it will simply prolong the adjustment period.
    [Show full text]