The financial system may be stable and flush with liquidity through injection, but in the absence of sufficient demand for liquidity from the real economy, the depressive economic conditions may continue.The politics of trying to save capitalism by saving only the financial capitalists may well turn out to be the last twist of the knife from free market fundamentalism to pave the way for a deeper and lasting recession.The basic story of the financial crisis is familiar enough. Thanks to the deep integration of global banking, securities, and funding markets, the contagion quickly spread to major financial institutions around the world.
This essay examines the consequences of the global economic and financial crisis for income distribution.
It first discusses the distributional background of the crisis, which is followed by an assessment of the impact, again on distribution, in different countries and then outlines the policy implications.
It argues that the mechanisms that helped sustain growing global imbalances and preserve the role of the dollar as international money are under threat in the current crisis.
The effects of the global financial crisis have been more severe than initially forecast.
According to data from the Bank for International Settlements, gross capital flows around the world plunged by 90 percent between 20.
As capital flows dried up, the crisis soon morphed into a crushing recession in the real economy.
This important collection of essays brings together the main findings of ILO research since the start of the global financial and economic crisis in 2008.
With contributions from diverse research disciplines, the volume provides new perspectives on employment and income-led growth and the role of regulation, and makes policy recommendations for the future.
So, in addition to reasserting public control over the credit creation process, the us has to be prepared in case the dollar plunges in value, and focus on how to resume the recycling of trade surpluses before contraction begins to destroy them.
The global monetary standard and thus the integrity of monetary reserves need to be safeguarded, and a recycling of trade surpluses would wean world demand away from its dependence on us overspending without the world getting stuck in a depression.