Financial Markets, Money, and the Real World seeks to explain the financial crisis of the 1990s, explores its consequences, and considers the possibility of worse in the future. The book emphasizes the central role of domestic and international markets in determining the economic growth rate, unemployment levels, and the international payments position of capitalist economies. It then identifies the creation of liquid markets as a major tendency of these domestic and international markets, and as a key obstacle to efficiency and prosperity. Statistical evidence and theoretical analysis support the arguments against liberalizing markets.
Contents:
- Keynes, you should be alive today!
- Keynes’s principle of effective demand
- Uncertainty and reality in economic models
- Investment: illiquid real capital versus liquid assets
- Why liquidity preference?
- Financial markets, liquidity and fast exits
- Planned investment, planned savings, liquidity and economic growth
- Complicating the picture: money and international liquidity
- Trade imbalances and international payments
- International liquidity and exchange rate stability
- If markets are efficient why has there been so much volatility in financial markets?
- Exchange rates and the Tobin tax
- The plumbers’ solution to destabilizing international capital flows
- The architectural solution: reforming the world’s money
- The economy and the twenty-first century