GEI Projects

12. Flaws in the World’s Financial Structure; The Regulatory Record 1980–95: An Historical Analysis

AIMS AND OBJECTIVES

The first objective is analysis of the above topic. The second objective involves the assembly of a high-level study group. This will involve both people with a mainly economic formation, and people with a mainly political one, including North American and Japanese, as well as European, experts in the field. Where possible the seminars will involve presentations of opposed interpretations, which will be brought out in the final report,

Previous experience has demonstrated the value of interprofessional, interdisciplinary and international inputs into a historical survey of this kind. The outcome will be a book, which - at least to some extent – enables the conflicting interpretations to speak clearly.

STUDY DESIGN

The methodology has a theoretical justification: it will demonstrate the contribution which post-modernist theory can make to the study of international political economy. The core purpose of such work is to insist upon the inseparable ideological context of many discourses – and therefore of much current research – in social science. It can provide insights which are a potentially important corrective to the narrow economism of the ‘New Political Economy’, which is based on neoclassical economics with its presumption of rationality.

In sum the research aims to question some of the certainties of the New Political Economy, and to encourage the application of a questioning post-modernist approach, in an important field of political economy.

POLICY IMPLICATIONS

The research will contribute to debate about the international financial system, and international financial regulation, in four main areas. First, are current levels of international exchange rates appropriately aligned ? Second, do the necessary political and economic conditions exist for international policy coordination between the G3 countries ? Third, to what extent are current moves in many countries towards central bank independence desirable ? Fourth, is the European intergovernmental agreement to move towards monetary union, as embodied in the Maastricht Treaty, likely to be durable ?

All business leaders know that they are vulnerable to unexpected shocks coming from the monetary and financial system. A well written survey of the evidence for an optimistic, and for a pessimistic, prognosis for the future – especially if the contributions to it have been obtained from people with widely diverging views – should be of wide interest.