DEVS 230 Lecture Notes - Lecture 6: New Institutional Economics, Foreign Portfolio Investment, Power Financial

• School: Queen's University
• Department: Global Development Studies
• Course: DEVS 230
• Professor: Susanne M Soederberg

Document Summary

Overview: review pwcr, what and why financial liberalization, resolving the financial crises: nifa 1 & nifa 2. : sap, liberalization: financial liberalization- attract fpi(foreign portfolio investment) and/or fdi (foreign direct investment, keynesianism-> neoclassical economics, finance masters over states, governments ensure sound economic fundamentals. Inflation: market equilibrium- laissez faire have equality between supply and demand, neoclassical economics. Legitimacy of crisis of wcr: 3 main triggers( pender, mexico, asia, africa, cracks in consensus. Car metaphor continued: drivers change( imf/wb out of front seat and global south in driver"s seat) and body updated but engine and road map still in imf and wb. Why not full embrace of nie in the pwcr: dissensus in the pwcr: stiglitz, kapur, bhagwati, minimal change to maintain legitimacy (why)power financial markets, strange financial power. Purchasing power: power in the pwcr. Official cause of the crises: cause: state failure, not market failure. If it was market it would open to capital control: solutions, sap + poverty reduction.