PSCI 4356 Lecture Notes - Lecture 8: Crony Capitalism, 1997 Asian Financial Crisis, Moral Hazard
24 May 2017
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Monday, april 10, 2017 8:34 am: where do they get their capital, historically the best way to grow an economy. Foreign portfolio investment: stock holders, bond buyers, these options have changed in their relative importance over time, postwar through oil crisis. We begin to see the world bank move into a development role. More countries gain independence during this time period, become developing countries. Opec forms in the 1960s, starts to double oil prices in the 1970s. Incredibly successful in power, many other cartels have failed: first oil crisis. Inflation around the world, averages around 10% Leftist parties take power throughout europe, political instability prevents monetary policy. Third world effects tightening: two different stories between oil importers vs. exporters, cost of maintaining isi increases, petrodollars flooded the amount of capital for lending, developing countries were able to borrow, second oil crisis, debt crisis. Even bigger growth rate on these financial flows. Mexico first domino in a chain of defaults.
