A finance policy for Scotland

At the national level, monetary policy is regarded as an important tool for government influence on the economy; this importance has been highlighted in the debate over the future of UK monetary policy in a European monetary union. The relevant (interrelated) questions are: how would the UK economy fare with monetary policy applied on a uniform basis across Europe, and with the full integration of national capital markets, and what would be the relative costs and benefits for the UK of a single European currency? These questions are equally valid with respect to the Scottish economy, as part of a single currency area, with a significant degree of financial integration, and with uniform UK monetary policy. It is particularly apposite at this time to consider these questions again for Scotland. Institutional change is proceeding apace within the UK financial sector, both with respect to the organisation and behaviour of the private sector, and also with respect to the policy environment within which it operates. In addition, the devolution debate raises questions about the desirability of policy-making at the Scottish level with respect to the financial sector, either within the present constitutional environment, or within the range of alternative environments under consideration

Hume e o Iluminismo Escocês: Duas Culturas

David Hume’s philosophy and economics are central to any account ofthe Scottish Enlightenment. It is now well-established that this enlightenment ischaracterised by a particular epistemological approach which distinguishes it fromother, particularly rationalist, enlightenments. While a variety of explanations hasbeen offered for this distinctive approach, little attention has been paid to the presencein Scotland of two quite different cultures: Highland (specifi cally, Gaelic) andLowland. Most Enlightenment fi gures were, like Hume, lowland (the main exceptionbeing Ferguson). But it seems implausible that the proximity to a very different culturehad no impact on enlightenment thought. Hume himself addressed issues ofGaelic culture in terms of the controversial Ossian poems, for example, and issuesof economic development of the Highlands. The purpose of this paper is to conductan initial exploration into how far it is possible to identify any Gaelic infl uences onHume in particular, and Scottish Enlightenment thought in general. This requiresin turn a characterisation of Gaelic epistemology, for which purpose we will drawon Foucault’s structuring of thought into epistemes. If we can understand Highlandand Lowland thought in terms of different epistemes, then some further refl ectionis required on Foucault’s framework of sequential epistemes.A fi losofi a e a economia de David Hume são fundamentais para qualquerconsideração do Iluminismo Escocês. Está atualmente bem estabelecido que esseiluminismo se caracterizou por uma abordagem epistemológica particular que odistingue de outros, especialmente de iluminismos racionalistas. Enquanto muitasexplicações têm sido oferecidas para essa abordagem distinta, pouca atenção tem sidodada para a presença na Escócia de duas culturas completamente distintas: Highland(especialmente a Gaélica) e Lowland. A maioria dos membros do Iluminismo pertencia,assim como Hume, à Lowland (a principal exceção foi Ferguson). No entanto,parece implausível que a proximidade a uma cultura tão diferente não tenha tidonenhum impacto no pensamento iluminista. O próprio Hume se referiu a questõesda cultura Gaélica em termos dos controversos poemas Ossiânicos, por exemplo, ea questões de desenvolvimento econômico das Highlands. A proposta deste artigoé conduzir uma exploração inicial a respeito de se é possível identifi car quaisquerinfl uências Gaélicas sobre Hume em particular e sobre o pensamento IluministaEscocês em geral. Isto, por sua vez, requer uma caracterização da epistemologiaGaélica, para o que nós recorreremos à estruturação do pensamento de acordo comepistemes tal como desenvolvida por Foucault. Se nós podemos entender o pensamentoda Highland e da Lowland em termos de epistemes, então alguma refl exãoposterior é requerida sobre a estrutura Foucauldiana de epistemes seqüenciais

Geoff Hodgson on Pluralism and Historical Specificity

Geoff Hodgson has made a variety of innovative contributions to thinking about the methodology of economics. Here two particular contributions are considered together: his advocacy of pluralism at different levels and his concern with historical specificity. We first explore his argument for specificity in terms of a pluralist ontology. We then consider his argument for methodological pluralism as contributing to an abductive methodology. We discuss this methodology as a basis for some generalities in theorising and discuss the potential further contribution that can be made by a pluralist ontology

Money and real economic disparities between nations and between regions

The hypothesis investigated is that, where real economic disparities exist between regions or nations, money and financial institutions may on balance tend to increase those disparities (the public sector being a major counteractive force). Part I lays the groundwork for the development of a theory which supports the hypothesis. Chapter 1 outlines the existing theoretical treatment of money and the distribution of income. The question has been addressed from a variety of standpoints, often indicating support for the hypothesis to some degree, but there is no systematic treatment of the role of money in the context of persisting real disparities in both the regional and international contexts. A strong sense of the real distributional implications of particular financial arrangements, however, emerges from policy discussions in both the regional and international contexts, surveyed in Chapter 2. In order to build up a general theory of money and distribution on the basis of these various strands of theory and policy, it is necessary to adopt some view of the relationship between money and expenditure on the one hand, and of the development process on the other. The discussion of the monetarist view of money, in Chapter 3, suggests that such an approach would not lend support to the hypothesis, money being viewed essentially as neutral. In contrast, the Keynesian view, also outlined in this chapter, is that money essentially is non-neutral. While this approach is more promising in terms of a basis for the theory to be constructed, the monetarist treatment of the balance of payments is to be borne in mind as highlighting the financial interrelationships between economies. Without attempting to explain underlying real disparities, Chapter 4 outlines three principles guiding the view to be taken of the development process. First, it is suggested that growth rate disparities should not be viewed as being continually eliminated by some convergence process, although the balance of forces is such that they should not be viewed as implying divergence, either. Second, it is suggested that very similar forces underly regional disparities and international disparities, warranting the development of a general theory referring to both. Third, the importance of the interdependence of economies is emphasised. In Part II, a theory of the demand for money is developed to apply to a range of economies, in Chapter 5, then a theory of money supply in Chapter 6. Finally, Chapter 7 concludes with a multiplier model which combines the money multiplier process and the income supermultiplier, to illustrate the way in which income adjustment may be induced. Part III is devoted primarily to assessing the theory outlined in earlier chapters against the evidence. The theory built up in Chapters 5-7 rested on a particular view of money in the temporal framework, which was set out in Chapter 3. The temporal evidence for the theory of demand for and supply of money in an economy, in the long-run and in the short-run, is taken from the experience of the U.S. and the U.K., and set out in Chapter 8. Chapters 9 and 10 then assess the application of this theory in a spatial framework. First, the regional evidence is discussed for Canada and the U.S. Then international evidence is given in Chapter 10 for groups of countries (low-income developing countries, middle-income developing countries, the capital-surplus oil exporters, and the industrialised countries). While there is the problem of identifying demand and supply curves, the evidence is overall consistent with relatively high liquidity preference in lower-income economies and relatively low supply of liquidity (offset somewhat by public sector flows of funds). Chapter 11 summarises the conclusions reached in earlier chapters, and then proceeds to suggest some further policy conclusions. In particular, it is suggested that transfers of funds (within and between nations) are likely to have real distributional effects which differ from the nominal amounts involved. Further, the implications for the distribution of income should be taken into account when policies promoting capital mobility are proposed. In general, however, the main conclusion reached is that the role of money and financial institutions should be taken into account in any theoretical framework which adequately describes economic disparities between regions and nations. (Abstract shortened by ProQuest.)

Prospects for the Progress of Heterodox Economics

While progress in orthodox economics is understood as an internal concept, progress in heterodox economics has both an internal and external dimension, where the latter refers to persuasive success. This broader understanding of progress reflects the fundamental, methodological level at which we distinguish between orthodox and heterodox economics. Regarding internal progress, orthodox economics retains cohesion at the level of formalism, but this cohesion is showing strains because of the inevitable limitations imposed by formalism. While more apparently disparate, heterodox economics can be seen to be more methodologically cohesive; this is explained in terms of a qualified form of pluralism at a range of levels. A discussion of progress of ideas in terms of persuasion (with sociological and institutional, as well as linguistic, dimensions) provides the basis for a considering a pluralist strategy for promoting the progress of heterodox economics

David Hume and Modern Economics

Hume’s contribution to modern economics is normally thought of in terms of his early statement of the quantity theory of money, and to a lesser extent his views on trade and development. At a methodological level the influence from his empiricism is commonly traced to the development of econometrics. But if we explore his philosophy more fully, we find a much richer set of ideas which can illuminate the way we approach issues in modern economics. Here therefore we explore Hume’s theory of human nature and his theory of knowledge in order to understand how he viewed economic behaviour as inherently bound up in other aspects of life. From this follows a perspective on the relations between economics and other disciplines (notably history, sociology and psychology) which may inform current explorations of these relations. This reading of Hume’s approach to economics is illustrated by revisiting his theories of money and growth, and his approach to empiricism. Hume holds the potential for a much richer contribution to modern economics than is normally understood

Monetary policy processes in postcommunist Romania

This thesis has a twofold aim. It first argues that monetary policy is inherently political because it involves struggles over meaning. It modifies Niebyl’s (1946) conceptual approach with an explicit attention to meaning, advancing a theory/ policy discourse/institutional practices nexus for exploring central banking. It shows that the emergence of leading representations of monetary processes (in Ricardo, Keynes and Friedman) involved discursive struggles during periods of crisis to assign meaning to problems and establish dominant interpretations. Politics and power were not grafted onto policy but were ontologically constitutive of it, shaping specific institutional configurations and practices. Second, this conceptualization is taken to a case study: a critical scrutiny of the role played by the central bank of Romania (NBR) in the reconstitution of the postcommunist Romanian economy as neoliberal economy from 1990 to 2008. The thesis asks what does the central bank do when the state, defined through its central planning legacy, ‘retreats’ from the market? The usual account explains policy success as direct result of commitments to neoliberal (monetarist) principles prescribed by international policy advice. Before 1997, neocommunist governments politically validated a communist legacy: soft budget constraints in the (state) productive sector. Politicized monetary policy decisions produced repeated crises. Afterwards, neoliberal governments gradually institutionalized an autonomous economic sphere, allowing an objective formulation and implementation of stability-orientated monetarist policies. The thesis challenges this orthodoxy. It argues against the attempts to erase politics from monetary policy processes that the above account articulates. Instead, drawing on critical conceptualizations of neoliberalism in its shifting forms, the period under analysis will be (re)interpreted as an ongoing process of neoliberalization, with the central bank an important actor in it. Indeed, the narration of crises identified the NBR as an essential instrument of institutional change and neoliberal ‘policy-making’. Monetarist narratives (ideologically) legitimized neoliberalism and effectively enacted neoliberal principles of monetary governance in the central bank. Thus, before 1997, the central bank functioned as a key vehicle of the neoliberal attack on the state’s capacity to craft economic reform. Since neoliberal institutions (also) take time to build, expanding policy repertoires outside the monetarist range invested the central bank with increasing powers to respond to structural and institutional resistance to neoliberal logics, arising from both communist legacies and ongoing political struggles. After 1997, the central bank’s rationality gradually changed to a constructive phase, normalizing an extralocal mode of economic governance whose distinguishing features will be identified. Institutional practices reconstructed the relationship between money, foreign exchange and treasury markets, subjugating liquidity management to the requirements of financialized accumulation. With financial stability increasingly tied into transnational actors’ choices, the NBR adopted inflation targeting. Nevertheless, inflation-targeting’s promise of stability operated to sideline the destabilizing nature of normalized neoliberal practices of monetary management, clearly evoked by the 2008 crisis. The thesis concludes with policy implications and an agenda for future research.EThOS - Electronic Theses Online ServiceOverseas Research Scheme : Department of Economics, University of Stirling : Funds for Women Graduates, UKGBUnited Kingdo

Chinese bank's credit risk assessment

This thesis studies the Chinese banks’ credit risk assessment using the Post Keynesian approach. We argue that bank loans are the major financial sources in emerging economies and it is uncertainty, an unquantifiable risk, rather than asymmetric information about quantifiable risk, as held by the mainstream approach, which is most important for the risk attached to credit loans, and this uncertainty is particularly important in China. With the universal existence of uncertainty, borrowers and lenders have to make decisions based on convention and experience. With regard to the nature of decision-making, this implies the importance of qualitative methods rather than quantitative methods. The current striking problem in Chinese banking is the large amount of Non-Performing Loans (NPLs) and this research aims to address the NPLs through improving credit risk management. Rather than the previous literature where Western models are introduced into China directly or with minor modification, this work advocates building on China’s conventional domestic methods to deal with uncertainty. We briefly review the background of the Chinese banking history with an evolutionary view and examine Chinese conventions in the development of the credit market. Based on an overview of this history, it is argued that Soft Budget Constraints (SBC) and the underdeveloped risk-assessing mechanism contributed to the accumulation of NPLs. Informed by Western models and experience, we have made several suggestions about rebuilding the Chinese convention of credit risk assessment, based on an analysis of publications and interviews with Chinese bankers. We also suggest some further development of the Asset Management Companies (AMCs) which are used to dispose of the NPLs.EThOS - Electronic Theses Online ServiceGBUnited Kingdo

O papel do crédito na divergência regional: regiões espanholas e países da Zona do Euro

This paper provides a theoretical account of the role of regional differences in cyclical patterns of credit availability for patterns of regional convergence or divergence. While mainstream theories imply either equalising regional capital flows, or else lower credit availability for peripheral regions due to market imperfections, Post-Keynesian theory of liquidity preference and financial structure imply the scope for greater credit volatility for peripheral regions, especially in downturns, contributing to real economic divergence. This latter account is assessed by means of an empirical analysis of patterns in bank credit over the business cycle among the Spanish regions and Eurozone countries