Thomas Kalinowski Ewha Womans University
Post on 24-Jan-2016
49 Views
Preview:
DESCRIPTION
Transcript
European and Asian monetary cooperation and integration from the perspective of comparative regional political
economy (CRPE)
Thomas KalinowskiEwha Womans University
Contents
1. Global changes diverging regional solutions: Collapse of the Bretton Woods System
2. A comparative regional political economic interpretation
3. Similarities of non-liberal capitalisms in Europe and East Asia
4. Differences in economic structure between EU and East Asia
5. The PE of monetary policies and cooperation in Europe and East Asia
1. Global changes diverging solutions: Collapse of the Bretton Woods System
• Collapse of Bretton Woods System 1971– End of gold guarantee and fixed exchange rates– Acceleration of financial globalization
• Diverging regional solutions:– Market orientation in UK,US– Deepening of regional integration in Europe– Emergence of national developmental states in
East Asia
Trilemma of economic policies‘Bretton Woods Corner’
Goal: stable exchange rates
‘Developmental State Corner’
Goal: sovereign monetary & industrial policies
‘Neoliberal Corner’
Goal: open capital accounts
GB, USA
EC/EU
East AsiaBretton Woods System -1971
Financialized capitalism- Free floating- Capital account lib.- Expansive macroeconomic policies
Euro Capitalism- EMSEMU- Four freedoms- ECB- No bail out clause
- Gold-dollar standard- Embedded liberalism- Keynesian macroeconomic policies- IMF
East Asian Capitalism- Unilateral pegs- Slow market opening- Economic planning- CMI
‘Keynesian Corner’
Goal: sovereign monetary and fiscal policies
What can explain the divergence between Europe and East Asia?
• Why did Europe find regional solutions while East Asia had to resort to national self help?
• Dissatisfaction with “realists”• Dissatisfaction with constructivists• Dissatisfaction with economists (Optimal
Currency Area Theory)• Go beyond realism and functionalism
2. A comparative regional political economic interpretation
• CPE (diversity of capitalism/regulation school):– Institutional change, interest struggle, structure– No convergence amid globalization– Problem: Too much focused on national political economies
• Regional integration studies:– Multi-level institutional framework– Regional convergence (in global divergence)– Problem: Too much focused on institutional change
• CRPE:– Highlight interaction between national and regional level– Focus on interest group rivalry and structural drivers of institutional
change– Limits: National and local differences
3. Similarities of non-liberal capitalisms in Europe and East Asia
• Maintaining strong manufacturing base• Relatively low level of financialization• Export orientation• Increasing intraregional trade Interest in:– Stable exchange rates– Mitigate problems of financial instability– Prevent upward pressure on currencies– Stable environment for international creditors
• Why the divergence?
4. Differences in economic structure between EU and East Asia
EU: Towards Euro Capitalism East Asia: Competition of national capitalisms
High level of intraregional trade within single market
Medium level of intraregional trade in semi-protected markets
Low level of export dependency of EU High level of dependencies on markets outside the region
“Diversified quality production” (Streeck) Assembly of standardized consumer goods
Convergence of economic development Divergence of economic development
Regional value added chains through horizontal FDI
Hierarchical division of labor dominated by MNCs (vertical FDI and outsourcing)
High level of intraregional investment and labor migration
Medium level of intraregional investment and low level of labor migration
5. The PE of monetary policies and cooperation in Europe and East Asia
EU: Towards Euro Capitalism East Asia: Competition of national capitalisms
Stability oriented “Coordinated market economies” (Hall/Soskice)
Developmental states’ industrial policies facilitate rapid catch up development
Strong labor unions and corporatism undermine national monetary sovereignty
Weak labor unions and “corporatism without labor” (Pempel)
Welfare states provide economic and social automatic stabilizers
Corporate welfare system leads to division of labor force
Experience of EMS instability Experience of Asian financial crisis
Path dependency of multilevel institutions Path dependency of developmental states
Evolving transnational interest groups National organization of interests
Conclusions
• There is a regional convergence in the global divergence of monetary policies
• Regional solutions in EU versus national solutions in East Asia
• CMI is not (yet) regional integration, but a regional supplement of national strategies
• The divergence can be explained by distinct economic structure and political economy
• The combination of CPE and regional integration studies helps to understand driving forces of monetary policy policies and cooperation in Europe and East Asia.
Annex 1: Exports as Percentage of GDP
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
0
5
10
15
20
25
30
35
40
45
50
China, P.R.: MainlandEuro AreaGermanyJapanKorea, Republic ofUnited States
Annex 2: Current Accounts as a Percentage of GDP
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
-10
-5
0
5
10
15
China, P.R.: Mainland Euro Area Germany Japan Korea, Republic of United States
Annex 3: Intraregional trade (% of total trade)
MERCOSUR ASEAN ASEAN+3 NAFTA EU270
10
20
30
40
50
60
70
World Trade
Maastricht Convergence Criteria
What is measured: Price stability Sound public
financesSustainable public finances
Durability of convergence
Exchange rate stability
How it is measured:
Consumer price inflation rate
Government deficit as % of GDP
Government debt as % of GDP
Long-term interest rate
Deviation from a central rate
Convergence criteria:
Not more than 1.5 percentage points above the rate of the three best performing Member States
Reference value: not more than 3%
Reference value: not more than 60%
Not more than 2 percentage points above the rate of the three best performing Member States in terms of price stability
Participation in ERM II for at least 2 years without severe tensions
Long term interest rates of euro zone countries (%)
2011Oct2010Jun2009Feb2007Oct2006Jun2005Feb2003Oct2002Jun2001Feb1999Oct1998Jun1997Feb1995Oct1994Jun1993Feb0
5
10
15
20
25
30
BelgiumGermanyFranceGreece (GR)IrelandItalyPortugal
Average yearly inflation in Eurozone countries, 1999-2007
Government spending as percent of GDP
Icelan
dFra
nce
Denmark
Swed
en
Belgium
Finlan
d
Greece Ita
ly
Hungary
Austria
United Kingd
om
Euro
area
Netherl
ands
Israe
l
Slove
nia
German
y
Portuga
l
Poland
Czech Rep
ublic
Irelan
d
New Ze
aland
Spain
Norway
Canad
a
United St
ates
Japan
Luxe
mbourg
Australi
a
Slova
k Rep
ublic
Switz
erlan
dKorea
Mexico
0
10
20
30
40
50
60
70
Social Expenditure as percent of GDP
France
Swed
en
Austria
Belgium
Denmark
German
yIta
ly
Finlan
d
Hungary
Portuga
lSp
ain
Greece
Norway
Luxe
mbourg
United Kingd
om
Slove
nia
Netherl
ands
Poland
OECD - T
otal
Czech Rep
ublicJap
an
Switz
erlan
d
New Ze
aland
Canad
a
Irelan
d
United St
ates
Australi
a
Slova
k Rep
ublicIsr
ael
Icelan
d
Estonia
Chile
Turke
yKorea
Mexico
0
5
10
15
20
25
30
top related