Inicio > Economía marxista > “From the Oil Crisis to the Great Recession: Five crises of the world economy”: J. A. Tapia Granados

“From the Oil Crisis to the Great Recession: Five crises of the world economy”: J. A. Tapia Granados

ABSTRACT — This article makes the case that the global economy has gone through five crises since the 1970s to the present. This implies not only that the world economy is a real entity, but also that the usual view that poses national economies as units of economic analysis is an approach with major limitations. The paper discusses the concept of “economic crisis” and provides data indicating that the world economy, not national economies, is the major unit to be analysed when trying to understand the economic reality of our time, and particularly the reality of crises. These crises are discrete, countable phenomena, distinctive states of an entity that can be properly called world economy, or world capitalism. Data on capital formation, on growth of the world output, of monetary aggregates, of unemployment rates and on industrial activity indicate five major “dips” of the global economy, i.e., world recessions, in (i) the mid 1970s, (ii) the early 1980s, (iii) the early 1990s, (iv) the early 2000s, and (v) the Great Recession that provisionally can be dated 2007-2009. To a large extent business cycle chronologies of national economies such as those produced by the NBER, the OECD, or other institutions are largely consistent with these five crises of the world economy which, obviously, had different manifestations in different nations and economic regions.

Introduction

According to Immanuel Wallerstein social scientists

of all kinds like to designate turning points. It is a device that clarifies immensely the story they are trying to tell. It becomes a basic building block of their analyses of the immediate phenomena they are studying. The choice of turning points constitutes a basic framework within which we all operate. But choosing different turning points can change entirely the logic of the analyses. What are considered to be the “turning points” can mislead as readily as they can clarify.

This article makes the case that there have been five crises of the world economy since 1970 to the present. To the extent that this assertion provides important insights on the basic dynamics of economic and social conditions, and through them, in a variety of issues worth of consideration in social science, it can be considered an important one.

Modern discussions about the Great Recession in particular or economic crises in general often turn to empirical data, immediately focusing on national statistics on national income, unemployment, financial markets, or other economic indicators. In this way the assumption is made, often implicitly, that the discussion about economic crises must refer to a unit of analysis that cannot be other than a national economy.3 Furthermore, and this is more common in the heterodox economic literature, perhaps following Marx’s reluctance to definitions, it appears as if everybody knew what a crisis is and there would be no need to waste time and words in defining it. The concept of crisis to be used will thus be the one that the author of the analysis likes to use. Of course, there are many exceptions to this pattern.

Stimulated by the world financial crisis that erupted in 2008 a number of recent papers and books have tried to generate an inventory of crisis, usually focusing on finance and banking. In Misunderstanding Financial Crises Gary Gorton (2012) has explained how to identify crises or, what to a large extent is the same, to set a chronology in which the start and the end of the crises is established, are relatively controversial issues in mainstream economics.4 Gorton cites studies by IMF economists Laeven and Valencia, by the now famous (or infamous) Reinhardt and Rogoff and by Bordo et al. While Laeven and Valencia refer to 124 systemic banking crises over the period 1970-2007, in This Time is Different Reinhardt and Rogoff consider a period of several centuries in which the “advanced economies” of Britain, the United States and France had respectively 12, 13 and 15 banking crises episodes, but they conclude that the frequency of crises declined in the post-WWII period; writing in 2001, quite before the big crash of 2008, Bordo et al. examined the period 1880-2000, concluding that the frequency of financial crises since 1973 had been “double that of the Bretton Woods and classical gold standard periods and is rivaled only by the crisis-ridden 1920s and 1930s,” though they found “little evidence that crises have grown longer or output losses have become larger.
Luc Laeven and Fabián Valencia have recently updated their inventory of crises.5 They conclude that during the period 1970-2011 there were 146 banking crises, 218 currency crises and 66 episodes of sovereign debt crisis and debt restructuring. Laeven and Valencia provide quite careful formal definitions of each type of crises but in any of the three types the basic characteristic is financial stress due to inability of private financial enterprises or government institutions to face due payments, which leads to more or less general bank runs and liquidations (banking crises), devaluation of the national currency (currency crisis) or sovereign debt defaults (sovereign debt crises). Laeven and Valencia consider that these three types of crises often overlap in a “twin” or “triplet” crisis, i.e., a period in which two or three of these types of financial crises occur at the same time.

In many countries there were banking crises in 2008, but for Laeven and Valencia problems in the financial sector reached levels of intensity sufficient to classify them as systemic banking crises only in later years, concretely 2009 for Denmark, Germany, Greece, Ireland, Mongolia, and Ukraine, 2010 for Kazakhstan, and 2011 for Nigeria and Spain. Though obviously Laeven and Valencia focus on national economies as the units in which crises can occur, they accept that, for instance, some banking crises “do not originate domestically but are imported from abroad when foreign subsidiaries of domestic banks get in trouble”.

For Reinhart and Rogoff (2009) financial crises occur in waves, and Laeven and Valencia agree. Figure 3 of Laeven and Valencia’s paper (figure 1 here) presents the number of banking crises that started in given years. The figure shows the large peak of “crisis activity” in 2008, but the rest of the crises are loosely distributed and since 1980 to the late 1990s there are many crises, with only the mid 1980s and the last two years of the century showing financial calm. Clear peaks of crisis activity are located in the mid 1970s and the early 1980s, and in three clusters during the 1990s, corresponding to the crises of the transition economies, of Latin American countries during the so-called Tequila crisis, and of East Asian countries during the Asian financial crisis. Laeven and Valencia refer to “crisis cycles,” explaining that they “frequently coincide with credit cycles”, so that out of 129 banking crises episodes for which credit data are available, 45 episodes were preceded by a credit boom.

Artículo Completo

Fuente: http://sitemaker.umich.edu/tapia_granados/

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