ABSTRACT OF PAPER
Title: In Search of a Global Vision to Face Current Systemic Imbalances. A Question of Justice? Might Keynes Be of Help?
Author:
The economic literature has proposed a wide range of interpretations concerning the causes of current systemic imbalances as well as extremely varied scenarios for their unwinding. Somewhat in line with a path initiated by Vines (2003) - though he was referring to the 1997 Asian crisis - we propose to rearrange such views by using the three alternatives outlined by Keynes in his 1945 memorandum "Overseas Financial Policy in Stage III" for both the elimination of the financial consequences of the war and the restart of global multilateralism. While asking the United States for assistance, Keynes indicated three possible outcomes for Britain and indirectly for the whole world. The "Starvation Corner" (which would have been forced on an overburdened Britain by the lack of American help) is here taken as a metaphor for the "gloomy view" about global imbalances, i.e. their disorderly unwinding through a worldwide recession, and as a framework to analyse views supporting the idea of unilateral adjustments. The "Temptation" option (a business-character US assistance to Britain) is here used to analyse the “US-deficit-is-sustainable” views, which rely on the strength of the American economy or the persistence of the Bretton Woods system with its adjustment mechanisms. Keynes argued for "Justice", or the reconsideration of the war burden coupled with a shared commitment towards a freer and more balanced world order. The comparison is here made with systemic views about current global imbalances like the "global co-dependency" interpretation, showing the complex, multilateral nature of the imbalances. Justice calls for a coordinated response, which is anyway implausible, due to the high degree of uncertainty facing policymakers. The complexity of "Justice" logic as imagined by Keynes highlights by comparison the need for imaginative solutions for today’s imbalances.
Registred web users only can download this paper - Go back
Please note that files available for download have not been checked for viruses. These files have been submitted by authors of the conference to this web site. Conference organisers can't accept any responsibility for damages caused to users by downloading such files.