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The Financialization Response to Economic Disequilibria

European and Latin American Experiences Edited by Noemi Levy, Professor, National Autonomous University of Mexico (UNAM) and Etelberto Ortiz, Professor, Metropolitan Autonomous University (UAM), Mexico
Europe and Latin America’s social and economic stagnation is a direct result of the unresolved phenomena of the financialization crisis that broke out in 2008 in developed countries. Editors Noemi Levy and Etelberto Ortiz analyze the limitations of economic growth and development under capitalist economic organizations where financial capital is dominant, as well as explore alternative economic policies.
Extent: 288 pp
Hardback Price: $130.00 Web: $117.00
Publication Date: 2016
ISBN: 978 1 78536 475 4
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  • Development Studies
  • Development Economics
  • Development Studies
  • Economics and Finance
  • Financial Economics and Regulation
  • Political Economy
  • Post-Keynesian Economics
Europe and Latin America’s social and economic stagnation is a direct result of the unresolved phenomena of the financialization crisis that broke out in 2008 in developed countries. Editors Noemi Levy and Etelberto Ortiz analyze the limitations of economic growth and development under capitalist economic organizations where financial capital is dominant, as well as explore alternative economic policies.

This book argues that institutional settings based on the international monetary market, the global production organization and the international commerce arrangements need to be redesigned to improve countries’ economic growth, job opportunities and salaries. In order for economic disequilibria to be reduced among regions, countries and social classes, economic surplus appropriation must be regulated. Divided into four distinct thematic sections, the chapters discuss how income distribution must be re-evaluated in order to halt the economic crisis of developing countries in Europe and Latin America, and to boost a new cycle of economic growth and development.

This critical discussion will be of value to economic scholars and researchers, policymakers wishing to learn more about the limitations of economic growth, as well as journalists specializing in economic issues.

‘Imbalances, disparities and disequilibria are amongst the inherent features of capitalism. How those features play out in the era of financialization across Europe and Latin America are at the core of this book. There is a rich menu of papers here ranging over what policy and other measures can address the structural disequilibria in Europe and impacts of human welfare, the impact of the forces of disequilibria on economic growth, and deep analyses of many features of disequilibria in Mexico.’
– Malcolm Sawyer, University of Leeds, UK

‘As finance emerged to agitate market equilibria, theories of financialization have set out to explain that agitation, and link it to deflationary and distributional trends in our economies. The challenge of financialization lies in the complexity necessary to incorporate finance effectively into models of production and distribution for economies that have become financial centres, as well as for countries where finance remains weakly developed. The editors and contributors of this book have risen to that challenge with a volume that lays out the new economics of open economy finance: a volume of first resort for those who wish to understand international finance today.’
– Jan Toporowski, SOAS, University of London, UK, University of Bergamo, Italy and International University College, Turin, Italy

‘Levy and Ortiz’s The Financialization Response to Economic Disequilibria is a timely book. It critiques mainstream economic theory and its limitations in explaining how economic conditions change or the transition from one state of equilibrium to another. Its analyses rely on Keynes, Kalecki, Kaldor, Minsky, Prebish, Furtado, and Marxists such as Luxemburg, Marini and Lapavitsas. Macroeconomic teachers interested in a heterodox approach may benefit from Levy and Ortiz’s book as complementary material with experiences showing the dysfunctionality of the global economy from the specific prism of financial disequilibria.’
– Economic Issues


Contributors: A. Álvarez, E. Basilio, R. Bellofiore, H. Bougrine, A. Chapoy, A. Cibils, C. Domínguez, F. Garibaldo, M. Guadalupe Huerta, L. Kato, N. Levy, T. López, J. Marroquín, S. Martínez, M. Mortagua, E. Ortiz, L.Á. Ortiz, G. Pinazo, L.-P. Rochon, C.A. Rozo, D. Tropeano. A. Vercelli




Contents:

INTRODUCTION
What are the Issues Now? Controversies About Disequilibria, Economic Growth, and Economic Policies
Noemi Levy and Etelberto Ortiz

PART I STRUCTURAL DESEQUILIBRIA IN EUROPE: WHAT TO DO
1. A Structural and Monetary Perspective of the Euro Crisis
Riccardo Bellofiore, Francesco Garibaldo and Mariana Mortagua

2. The Big Financial Crisis and the European Economic Adjustment: A Road Towards the Strengthening of the Neoliberal Agenda
Ma. Guadalupe Huerta

3. Debt Deflation Theory and the Great Recession
Domenica Tropeano and Alessandro Vercelli

PART II THE FORCES OF DESEQUILIBRIA AT WORK: THEIR IMPACT ON GROWTH
4. The Periphery in the Productive Globalization: A New Dependency?
Alan Cibils and Germán Pinazo

5. Latin America in the New International Order: New Forms of Economic Organizations and Old Forms of Surplus Appropriation
Noemi Levy

6. Inequality, Technological Change and Worldwide Economic Recovery
Carlos A. Rozo

7. Global Disequilibria and the Inequitable Distribution of Income
Alma Chapoy

8. Financialization, Crisis and Economic Policy
Hassan Bougrine and Louis-Philippe Rochon

PART III DISEQUILIBRIA IN THE MEXICAN ECONOMY: THE EXPORT GROWTH MODEL, ECONOMIC STAGNATION AND LABOR PRECARIZATION
9. The Limits of the Export Led Growth Model: The Mexican Experience
Etelberto Ortiz

10. The Mexican Economy in 2014: Between Crisis, Free Trade, Social Devastation and Labour Precarization
Alejandro Álvarez and Sandra Martínez

11. The Accumulation Mode of Production in Mexico and the Economic Structure of the Manufacturing Industry
Luis Kato

PART IV DISEQUILIBRIA IN MEXICO: THE FINANCIAL AND FISCAL TRAP
12. Economic Growth and Financial Development in Mexico: From a Virtuous Circle of a Bidirectional Causality to a Financial Subordination
Teresa López and Eufemia Basilio

13. Private Sector Finance in the Era of Deregulation and Economic Openness: Mexico 2000-2014
Christian Domínguez and Juan Marroquín

14. Pro-cyclical Fiscal Policy and the Fiscal Support of the Mexican Monetary Policy
Luis Á. Ortiz

Index