Exchange Rate Policy and Economic Growth after the Financial Crisis in Central and Eastern Europe

In a paper on the effects of the global financial crisis in Central and Eastern Europe (CEE), a European Union economist reacts to a companion paper (Åslund, 2001) published in the same issue of Eurasian Geography and Economics on the influence of exchange rate policies on the region's recovery. The author argues that post-crisis corrections in current account deficits in CEE countries do not in themselves signal a return to steady economic growth. Disagreeing with Åslund over the role of loose monetary policy in fostering the region's economic problems, he outlines a number of competitiveness problems that remain to be addressed in the 10 new EU member states of CEE, along with improvements in framework conditions supporting future macroeconomic growth.     

The Land Resources of the Ukraine; their Evaluation and Inventory Methods

Three EU-based human geographers argue for the need to contextualize the meaning of the current economic crisis in Europe, pointing to precedents in European history. More specifically, they view Europe (as both a set of practices and ideas) as a product of successive crises that have yielded an unexpectedly resilient structure for the European Union, which retains sufficient flexibility to permit different EU members to adapt their economies to the crisis on their own terms without descending into the disintegrative pull of protectionism. The authors also show how the uneven effects of the economic crisis threaten a renewed east-west divide, and highlight the ongoing relevance of the European Union as a transnational fiscal regime with important implications for EUrope's future. Journal of Economic Literature, Classification Numbers: F130, F150, G010, N130, N140. 1 figure, 1 table, 58 references.     

The Failed European Union: Franco-German Relations during the Great Depression of 1929–321

French scholars have led a revival of interest in inter-war efforts at European integration and the prominent role played by the French Foreign Minister, Aristide Briand. Franco-German rapprochement was integral to this effort, but with the death in October 1929 of his like-minded German counterpart, Gustav Stresemann, it is generally held that Berlin adopted a more confrontational foreign policy even before Hitler took power. However, this article demonstrates that in spite of a series of upsets, an intense and sustained effort continued during the years of the Great Depression (1929–32) to forge Franco-German détente. This culminated in September 1931 in a Franco-German treaty that established the mechanisms for far-reaching integration of the two countries’ economies, with a customs union and European union as the ultimate goals. It then examines in detail how and why this remarkable effort collapsed during 1932, paying particular attention to an unforeseen crisis in trading relations and the impact of a media scandal surrounding the publication of Stresemann's memoirs. Despite this failure, efforts to integrate Europe around a Franco-German axis between 1929 and 1932 can nonetheless be understood as part of a deeper process that survived Hitler and saw the emergence of the current European Union.     

Remaking the architecture: the emerging powers,self‐insuring and regional insulation

This article examines the interaction between the emerging and traditional powers in global governance reform, and asks whether we are heading towards an international financial system that is more fragmented, where power is more diffused and national and regional arrangements play a more prominent role, at the expense of global multilateral institutions. It begins with a brief discussion of the global systemic and country‐specific factors that motivate Brazil, China and other emerging countries to accumulate large currency reserves. We find that national arrangements for managing financial and currency crises will continue to hold sway for emerging countries in the wake of the global crisis. However, the actual capacity of regional arrangements in managing future financial crises is uncertain, and the significance of regional alternatives in the emerging architecture should not be overstated. The real capacity of East Asian regional arrangements to manage financial crises, payments problems or currency attacks is still untested, and key thresholds in multilateralization still lie ahead. In South America, multilateral lender‐of‐last‐resort support inside the region is largely confined to the sub‐regional level and is limited by Brazil's reticence. Enduring reliance on bilateral measures for financial crisis management is noted. Where there has been progress in regional solutions, since the global crisis, has been in the role of regional development banks in providing financing for developing countries to enact counter‐cyclical policies. Such support also provides insulation for states in the region against the contagion effects of international financial crisis. We are in the midst of transitioning to a more diverse and multi‐tiered global financial and monetary system. A reformed IMF could have a role to play in addressing global imbalances and encouraging a shift from national reserves to collective insurance, however, it would be preconditioned by significant shifts in the policy, lending operations, and internal governance of the Fund, and willingness among the G20 to strike a new consensus on how to deal with imbalances, and new accommodation on acceptable reserve levels.     

The Euro: Faith Hope and Parity

The inauguration of the euro as the currency of the European Union is the most far‐reaching step so far taken in the long‐term movement for regional political and economic integration. The new money demonstrates that the initial customs union established by the Treaty of Rome has grown to such an extent that member states are willing to surrender control over their national central banks and currencies. Only three members of the EU have refused to join—Britain, Denmark and Sweden. Despite widespread scepticism, the euro so far has been a success. The new currency, while a dramatic innovation, is also congruent with financial dimensions that can be traced through the history of the European Community. The experience of inflation in the 1960s and 1970s was a powerful incentive to establish strong European central banking institutions. The euro is both derivative from and competitor with the US dollar, and American historical experience over the long term as well as foreign policies since the Second World War are germane to analysis. For Britain, remaining outside the euro zone so far has not brought negative consequences and may have been beneficial to the economy. For most member governments of the EU, the opportunity to pool resources through a regional currency understandably has been a persuasive incentive, especially given the enormous growth of private capital markets. The creation of the euro has been facilitated by the shifting nature of money. Currencies have changed from distinctive national components of the highly structured Bretton Woods system to relatively freely traded commodities, and the traditional distinctive characteristics of money have been blurred with the evolution of credit markets, financial instruments and technology. The fundamental test of the euro will occur when member states face differentiated political pressures to inflate economies in order to combat unemployment. To date, the European currency has been the latest confirmation of the insight of Jean Monnet and others to employ economic integration to reduce the likelihood of a resurgence of militarism and war.     

China's Exchange Rate Controversy: A Balanced Analysis

A noted American authority on China's economy and monetary policy presents a statistical as well as theoretical analysis of a variety of perspectives on the controversy surrounding China's currency, basing his paper on both. The author provides the historical background and comprehensive summaries, focusing on different viewpoints about whether China's currency is undervalued, and thus may contribute to global imbalances. In the paper, he divides observers involved in the controversy into two main camps, namely the ones who find China's trade balances to be sensitive to price effects through exchange rate adjustments and those who emphasize other factors as bearing the responsibility for China's large surpluses, including the U.S. credit bubble emerging before the global financial crisis, as well as a version of Dutch disease.     

Angel investing in an austerity economy – the take-up of government policies in Portugal

Business angels (BAs) are recognized as playing a significant role in stimulating entrepreneurial activity. With the decline in both bank lending and venture capital investment since the onset of the global economic crisis, government efforts to stimulate BA activity have become a more significant component in strategies to increase the level of entrepreneurial activity. This paper examines the responsiveness of angels to such initiatives in so-called austerity economies – countries that were hardest hit by the financial crisis of 2008 and subsequent global recession and, as a consequence, had to take extreme economic and fiscal measures to reduce their budget deficits. We examine this question in Portugal which experienced one of the deepest recessions in the European Union following the implementation of severe austerity measures. This study confirms that government intervention to support angel investing can have a positive impact. However, the different types of intervention have varied in take-up rates. Other countries can learn from the Portuguese experience in three ways: the types of interventions that have the highest and lowest levels of take-up, the link between the design and the take-up of incentives, and types of intervention that should be considered but have not been implemented in Portugal.     

Growth in the International Reserves of Russia,China, and India: A Comparison of Underlying Mechanisms

A noted international specialist on the Russian economy compares the different mechanisms by which the emerging powerful economies of Russia, China, and India accumulated substantial foreign reserves during the 2000s in the lead-up to the global financial crisis. He also investigates the costs incurred by these countries of intervention into exchange markets to maintain exchange rate regimes supporting such accumulation, as well as measures undertaken after the crisis to address sudden and massive outflows of foreign private capital and considerable decreases in demand for imports in developed countries. The author argues that each of the three countries can be viewed as a prototype for a particular means of reserve accumulation among emerging market countries that has led to the revival of the Bretton Woods international monetary system.     

Restructuring Intra-urban Space during China's Transition. Jian Feng

An American geographer whose research focuses on Europe reports on changes in geographical patterns and trends in merchandise export trade after the dismantling of political- economic divisions prevailing during the Cold War and their replacement by European political and economic integration as well as globalization. Analysis and comparison of international trade data for the years 1960 and 2010 reveal a dramatic expansion in the role of Germany and China in European merchandise trade, accompanied by a decline in the importance of the United States and United Kingdom. The author also demonstrates how some countries such as the Netherlands have expanded their exports to a broader range of European countries, whereas others appear to be consolidating their roles as leaders of regional trade blocs (e.g., Italy in Southeastern Europe).     

The Impossible Trinity: Inflation Targeting,Exchange Rate Management and Open Capital Accounts in Emerging Economies

This article contributes to the debate on macroeconomic management and capital account regulations in developing and emerging countries (DECs). It argues that the recommendation by neoclassical economists and international financial institutions (IFIs) to combine an inflation‐targeting regime with exchange rate management, whilst maintaining open capital accounts, is not only impossible but also potentially counterproductive. The article draws on extensive semi‐structured interviews with currency traders in Brazil and London to show that this is due to the particular way such a regime shapes central bank interventions in the money and foreign exchange markets and the destabilizing way these interventions interact with financial market expectations. The interview results also demonstrate that the guidelines issued by IFIs actually undermine, rather than aid, DEC central banks’ initial attempts to manage excessive exchange rate movements. These results support the long‐standing argument by heterodox economists and critical international political economists that DECs need to make the exchange rate an explicit instrument and goal of their macroeconomic policy and complement it with comprehensive capital account regulations to reduce the destabilizing impact of international capital flows. The interview results also give some concrete suggestions on how to achieve this.     

Conceptualising European Privatisation Processes After the Great Recession

A wave of privatisation is unfolding in Europe in the wake of the financial crisis, but it has yet to receive serious scholarly attention. This paper examines the case of Ireland, where an austerity strategy and European Union International Monetary Fund bailout conditionality have given impetus to the transfer of public assets to the private sector. Theoretically, the paper explains the roots of the phenomenon with reference to a reformulated concept of “accumulation by dispossession” whose usefulness lies in emphasising the politico‐economic drivers of privatisation, which have been neglected in the mainstream literature. A typology is presented that argues that accumulation by dispossession manifests itself, in practice, through four main processes: (1) private repossession of assets nationalised during the financial crisis; (2) restructuring of state‐owned enterprises; (3) commodification of assets and services hitherto located outside the market; and (4) privatised stimulus through public–private partnerships. The paper's framework should be useful to conceptualise ongoing privatisation processes in other European countries.     

Green Growth and the Balance-of-payments Constraint

The notion of green growth emphasizes environmental and climate policies that make economic activities more sustainable while contributing to higher growth. In developing countries, the ability of such policies to help solve the most pressing economic challenges is essential for green growth to be a viable concept. Notably, current account deficits, foreign exchange shortage and external debt accumulation are serious obstacles to economic development. The analysis in this article therefore approaches green growth from a new perspective. With a focus on energy, the article estimates the impact of the transition from fossil fuels to renewable energy on the balance-of-payments constrained growth of energy-importing developing and emerging economies. It assumes that their current economic structure otherwise remains the same. Since renewable energy production is more efficient than fossil fuel combustion and reduces import dependence, the energy transition increases the annual balance-of-payments constrained growth rate of the selected countries by up to 2.5 percentage points on average in a scenario from the present until 2050. This means that policies in favour of renewable energy allow those countries to grow faster without accumulating foreign debt or even triggering currency crises. Consequently, staying with the current fossil fuel-based energy system implies missing a significant potential for growth and development.     

EMU: A Worthwhile Gamble

In a year from now, eleven of the current fifteen member states of the EU will, in all probability, sign up to European Monetary Union. In this article Pierre Jacquet looks at the reasons for widespread EMU support and at the economic as well as the political rationale for the single currency. Weighing up the cost-benefit analysis of monetary union and comparing it to alternatives, the author argues that EMU is a worthwhile gamble and that the task should now be to make it a success. This implies the willingness of member states to undergo overdue structural reforms and to be more forthcoming in promoting an effective coordination of economic policies.     

The euro crisis and European citizenship: The euro 2001–2012 – celebration or commemoration? (Respond to this article at http://www.therai.org.uk/at/debate)

The Eurozone crisis has highlighted the problems of European economic integration, but what effects is it having on social cohesion in the European Union? Using symbolic, historical and anthropological perspectives this article examines the relationship between the single currency and European citizenship. I argue that the roots of the crisis lie in the euro's origins. Economic and monetary union (EMU) was an assemblage of two very different rationales: one economic and based on neoliberal assumptions, the other political and geared towards forging social cohesion among Europeans. Binding Europe through a common currency was always a risky endeavour, placing heavy expectations on the identity‐effects of money. EU leaders also seemed curiously oblivious to the possible negative effects that weaknesses in the euro might have for European solidarity. Drawing on theories of money and its role as a technology of citizenship and symbolic boundary marker, I argue that the euro continues to symbolize European integration, only now it has come to symbolize the cleavages and tensions that divide Europe. Paradoxically, one effect of the Eurozone crisis is not fragmentation but an acceleration of the deepening of European economic governance. However, the centralization this entails imposes heavy costs on the EU's peripheral members and raises concerns about the future of democracy in Europe.     

次贷危机中的日本金融经济动向

本文通过分析日本金融市场短期利率、长期利率、股票指数、日元汇率指标的变动,来评估次贷危机对日本金融市场和金融体系产生的影响。文章认为次贷危机使日本丧失了一个难得的金融政策正常化以及走向长期经济增长的机会,日本金融指标变动与美欧的同步化使得日本难以独善其身,而高企的日元汇率随时有反转的可能。     

人民币国际化及其对币缘政治的影响

当今世界有两个货币现象引人注目,一个是欧元危机,另一个是人民币币缘政治影响的扩大。文章总结了扩大人民币币缘政治影响所取得的成效,探讨了进一步提升的路径。将人民币币缘政治影响的扩大总结为使用范围扩大、跨境贸易中结算额增加、与其他货币的互换额攀升、可直接交易国家增多、离岸清算中心数增加、国际地位提升、国际化指数提高7个方面;提出了进一步提升人民币币缘政治影响的6点建议：①促进经济持续稳定发展,增强我国的综合实力与国际竞争力,②积极开展国际贸易合作,③遵循周边→区域→全球的顺序有序推进,④以地缘优势共建“一带一路”倡议,⑤充分发挥香港、中国（上海）自贸区的作用,⑥借力亚投行的平台,优化国际金融格局。     

Mapping cultural policy in Portugal: From incentives to crisis

Abstract

Taking into account the course of cultural policy in democratic Portugal, and against the backdrop of the international crisis of 2008 and the sovereign debt crisis of 2011, this article seeks to interpret recent changes in the cultural sector in Portugal. Using both qualitative and quantitative methods it focuses on three main aspects: institutionalisation of democratic cultural policy; government funding; cultural organizations and facilities. The 2008 crisis put an end to a period in which investment tended to grow. We place Portugal in the broader European context, concluding that the Portuguese cultural scene may once again diverge from that of other European countries.     

Rhetoric of unity and cultural diversity in the making of European cultural identity

The fundamental aim of the cultural policy of the European Union (EU) is to emphasize the obvious cultural diversity of Europe, while looking for some underlying common elements which unify the various cultures in Europe. Through these common elements, the EU policy produces ‘an imagined cultural community’ of Europe which is ‘united in diversity’, as one of the slogans of the Union states. This discourse characterizes various documents which are essential to the EU cultural policy, such as the Treaty of Lisbon, the European Agenda for Culture and the EU’s decision on the European Capital of Culture program. In addition, the discourse is applied to the production of cultural events in European Capitals of Culture in practice. On all levels of the EU’s cultural policy, the rhetoric of European cultural identity and its ‘unitedness in diversity’ is related with the ideas and practices of fostering common cultural heritage.     

Ukraine's Financial Crisis, 2009

A prominent specialist in the economic affairs of the former Soviet Union relates and analyzes the state of Ukraine's economy in light of a series of discussions and interviews with the country's Prime Minister and leading economic officials in Kyiv in 2008 and April 2009. The author, a former economic advisor to the country's government and co-chair of the UN's Blue Ribbon Commission for Ukraine, devotes this paper to a penetrating analysis of the impact of the global financial crisis of 2008-2009 on Ukraine's budget, banks, exchange rates, money supply, industrial sectors (particularly energy and steel), GDP, and inflationary pressures. Due attention is given to economic relations with the EU and Russia as well as to financial assistance from the IMF.Journal of Economic Literature, Classification Numbers: E500, E600, O520, P200. 1 table, 4 figures, 38 references.