Tuesday, April 10, 2012
Shock Waves
23-4-23 Causes of '22 & '23 Economic Collapses | EcEx > . skip > .
24-4-28 (Realistic) [Ruscian Demographics & Economy Imploding] - Inside R > .
Stagflation
22-7-22 Stagflation - Inflation + Recession - EcEx > .
Phillips Curve - Inflation inversely proportional to unemployment - EcUnd > .
22-10-28 How China Is Helping to Reduce Inflation - Patrick Boyle > .
In economics, stagflation or recession-inflation is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended to lower inflation may exacerbate unemployment.
The term, a portmanteau of stagnation and inflation, is generally attributed to Iain Macleod, a British Conservative Party politician who became Chancellor of the Exchequer in 1970. Macleod used the word in a 1965 speech to Parliament during a period of simultaneously high inflation and unemployment in the United Kingdom. Warning the House of Commons of the gravity of the situation, he said:
The term, a portmanteau of stagnation and inflation, is generally attributed to Iain Macleod, a British Conservative Party politician who became Chancellor of the Exchequer in 1970. Macleod used the word in a 1965 speech to Parliament during a period of simultaneously high inflation and unemployment in the United Kingdom. Warning the House of Commons of the gravity of the situation, he said:
"We now have the worst of both worlds—not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of 'stagflation' situation. And history, in modern terms, is indeed being made."Macleod used the term again on 7 July 1970, and the media began also to use it, for example in The Economist on 15 August 1970, and Newsweek on 19 March 1973. John Maynard Keynes did not use the term, but some of his work refers to the conditions that most would recognise as stagflation. In the version of Keynesian macroeconomic theory that was dominant between the end of World War II and the late 1970s, inflation and recession were regarded as mutually exclusive, the relationship between the two being described by the Phillips curve. Stagflation is very costly and difficult to eradicate once it starts, both in social terms and in budget deficits.
Monday, April 9, 2012
Ten Points - Washington Consensus
22-3-18 Washington Consensus in "Rather Pathetic Economy of Russia" - EcEx > .
23-1-16 Bretton Woods - Why it's Important - EEE > .
22-12-8 Role of oligarchy in Russia | Pootinesque Corruption (subs) - MK > .
The Washington Consensus is a set of ten economic policy prescriptions considered to constitute the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Monetary Fund (IMF), World Bank and United States Department of the Treasury. The term was first used in 1989 by English economist John Williamson. The prescriptions encompassed free-market promoting policies in such areas as macroeconomic stabilization, economic opening with respect to both trade and investment, and the expansion of market forces within the domestic economy.
Subsequent to Williamson's use of the terminology, and despite his emphatic opposition, the phrase Washington Consensus has come to be used fairly widely in a second, broader sense, to refer to a more general orientation towards a strongly market-based approach (sometimes described as market fundamentalism or neoliberalism).
American imperialism .
Beijing Consensus .
Bretton Woods system .
Central America Free Trade Agreement (CAFTA)
Democratic capitalism .
Economic growth .
The End of History and the Last Man .
Andre Gunder Frank .
Gross domestic product .
Hyperinflation .
Immanuel Wallerstein .
Lima Consensus .
Macroeconomics .
Mumbai Consensus .
North American Free Trade Agreement (NAFTA)
Poverty Reduction Strategy Paper .
Structural adjustment .
World Systems Theory .
Subsequent to Williamson's use of the terminology, and despite his emphatic opposition, the phrase Washington Consensus has come to be used fairly widely in a second, broader sense, to refer to a more general orientation towards a strongly market-based approach (sometimes described as market fundamentalism or neoliberalism).
The concept and name of the Washington Consensus were first presented in 1989 by John Williamson, an economist from the Institute for International Economics, an international economic think tank based in Washington, D.C.
The consensus as originally stated by Williamson included ten broad sets of relatively specific policy recommendations:
The consensus as originally stated by Williamson included ten broad sets of relatively specific policy recommendations:
- Fiscal policy discipline, with avoidance of large fiscal deficits relative to GDP;
- Redirection of public spending from subsidies ("especially indiscriminate subsidies") toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
- Tax reform, broadening the tax base and adopting moderate marginal tax rates;
- Interest rates that are market determined and positive (but moderate) in real terms;
- Competitive exchange rates;
- Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
- Liberalization of inward foreign direct investment;
- Privatization of state enterprises;
- Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
- Legal security for property rights.
In emphasizing the magnitude of the difference between the two alternative definitions, Williamson has argued (see § Origins of policy agenda and § Broad sense below) that his ten original, narrowly defined prescriptions have largely acquired the status of "motherhood and apple pie" (i.e., are broadly taken for granted), whereas the subsequent broader definition, representing a form of neoliberal manifesto, "never enjoyed a consensus [in Washington] or anywhere much else" and can reasonably be said to be dead.
Discussion of the Washington Consensus has long been contentious. Partly this reflects a lack of agreement over what is meant by the term, but there are also substantive differences over the merits and consequences of the policy prescriptions involved. Some critics take issue with the original Consensus's emphasis on the opening of developing countries to global markets, and/or with what they see as an excessive focus on strengthening the influence of domestic market forces, arguably at the expense of key functions of the state. For other commentators, the issue is more what is missing, including such areas as institution-building and targeted efforts to improve opportunities for the weakest in society.
American imperialism .
Beijing Consensus .
Bretton Woods system .
Central America Free Trade Agreement (CAFTA)
Democratic capitalism .
Economic growth .
The End of History and the Last Man .
Andre Gunder Frank .
Gross domestic product .
Hyperinflation .
Immanuel Wallerstein .
Lima Consensus .
Macroeconomics .
Mumbai Consensus .
North American Free Trade Agreement (NAFTA)
Poverty Reduction Strategy Paper .
Structural adjustment .
World Systems Theory .
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