PKT message, Restoring Demand in the World Economy (Halevi

Restoring Demand in the World Economy (Halevi - Fontaine)

REFERENCE: Joseph Halevi and Jean-Marc Fontaine (eds.), Restoring demand in the world economy : trade, finance and technology. Cheltenham, UK: Edward Elgar, 1998. ISBN: 1858984580

From the publisher's abstract: . . . macroeconomic policy debate has been dominated . . . by supply-side considerations. Distinguished contributors . . . argue that this has led towards depression at a world level . . .[table of contents, see below]

COMMENTS --(1) The articles were originally presented in 1994 (see p. xi), but are still interesting. (2) Only three articles address global demand (the global aggregate), as opposed to national demand in a global context. The three are:

Chapter 2 Kregel - p31 (Conclusion) - "The global economy thus faces the impact of a number of factors which lead to declining levels of demand, the post-poned post-war reduction in defence spending, the presumed necessity to reduce government indebtness . . .Resolving the problem that Keynes raised over fifty years ago of creating an automatic mechanism to defuse the natural tendency of the international system to produce a deficient level of global demand is thus even more important."

Chapter 4 Akyuz - p.43 "..neither the Bretton Woods arrangement nor the floating exchange rate system. . .were properly equipped to ensure that the major economies pursued macroeconomic policies that yielded an adequate pace of global demand expansion."

p.57 -58 (Conclusion) - "Over the past decade, the performance of the major industrial economies, and pro toto of the world economy, has been seriously impaired by problems of demand. The degree of global demand deficiency has not been constant; indeed, fluctuations in the pace of demand creation have been only too evident. Nevertheless, a deficiency of demand has been the general rule."

Chapter 5 Sen - p.61 "..when these international capital flows circulate within the confines of the industrialized countries, international demand is generated for services rather than goods, a situation which in the past had proved incapable of reviving real demand."

p. 62 "central thesis of the paper on links between international capital flows and global demand. . . . and a plea for a revived flow of finance in the direction of the developing countries in the interest of global demand and real growth."

CRITIQUE - Global macroeconomics, including analysis of global effective demand, should be combined with a world(-)system(s) perspective. Discussing global effective demand without discussion global exploitation (incl. global wage differential, global wage discrimination [unequal pay for work of equal value] and unequal exchange) is missing a most important dimension of global macro reality. The book does not go very far in that direction.

Gernot Köhler

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CONTENTS of Halevi-Fontaine volume --

1. The problem of unemployment: its economic and political dimension / Amit Bhaduri --

2. The myth of economic policy independence: some reflections on the failure of post-war schemes for stabilization of global demand in the post-war period / Jan A. Kregel --

3. Effective demand and productive systems / Renato Di Ruzza --

4. Inflation paranoia and growth phobia in the major industrial countries / Yilmaz Akyuz --

5. International capital flows and global demand / Sunanda Sen --

6. History, politics and effective demand in Asia / Joseph Halevi and Peter Kriesler --

7. Finance and investment in the context of development: a post Keynesian perspective / Victoria Chick --

8. Capital mobility and the problem of effective demand in underdeveloped economies / Prabhat Patnaik --

9. Technical change and the dynamics of comparative advantages: implications for the LDCs / El Mouhoub Mouhoud --

10. The importance of effective demand in the transition from a supply- to a demand-constrained economic system / Louis Haddad --

11. Some thoughts on the possible contribution of the economies in transition to the rehabilitation of demand / Wladimir Andreff --

12. Restoring demand in the process of European construction / Jacques Mazier--

13. The roots of austerity in France / Alain Parguez.

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ADVERT -- Read/buy G. Köhler and A. Tausch, Global Keynesianism: Unequal Exchange and Global Exploitation. Nova Science, USA, 2001. See amazon.com