1. Policies and problems February 19th 2012 revised march 2018
Prof Robin Matthews
Further papers by robin Matthews can be found at
Also and

5. Networks: default state Small world: highly clustered, short path lengths
Degree of a node is the number of edges (k) connecting it to other nodes.
High degree nodes have many connections (high k); low degree nodes have few (low k)
P(k) probability of degree k follows a power law
P(k) ~ z k – α..
P(k)~ z k – α..

6. Haldane (2009)

7. Haldane (2009)

8. Haldane (2009)

9. The environment
Gaia or exploitation

12. Roots of the great recession
It always happens again

14. GLOBAL POSITIVE FEEDBACKS
Securitization
GLOBAL POSITIVE FEEDBACKS
1980 – 2006
(circa)

15. CHANGING IDEOLOGY Privatization Nationalization Deregulation
belief that the state ownership is inefficient
Economic shock therapy
Deregulation
Reliance on self regulation
Condoning shadow banks and falsification
Monetarism
Policies based on interest rates
rational expectations theory
supply side economics
Nationalization
USSRUK
USSRUSA
Bail outs
Regulation
Awaiting policy decisions
Keynesianism
fiscal policy
deficit finance
demand side economics

16. The financial tower of Babel: 21ST century
CDO’s
CDC’s
CDW’S
SWF’S
SPV’’s
SPE’s
CONDUITS
IPO’s
PRIVATE EQUITY FUNDS
HEDGE FUNDS
DERIVATIVES/OPTIONS
SHADOW BANKING SYSTEM
REGULATED BANKING SYSTEM
CORPORATE BONDS
GOVERNMENT BONDS
LIQUID ASSETS
CASH
unregulated
regulated

17. Causes of crises Low interest rates Savings glut Financial innovation
Moral hazard
None of the above
All of the above
Samudaya (the second noble truth: thirst)

18. interdependence Low interest rates Savings glut Financial innovation
Moral hazard

19. interdependence samudaya Low interest rates Savings glut
Financial innovation
Moral hazard
samudaya

20. Thirst/desire/craving (nafs/samudaya)
Moral hazard
Financial
innovation
Low interest rates
Savings glut

21. Emerging nations
Back to the past

22. Economist Sept

26. Keynesian and monetarist
Cryptic models
Keynesian and monetarist

27. Aggregate demand
The price level
Aggregate supply
∑ S
∑ D
Real output
Keynesian case with liquidity trap

28. Aggregate demand
The price level
∑ S
Aggregate supply
∑ D
Real output
The pure classical case
Reagonomics and crowding out

29. Keynes: sources of unemployment
The liquidity trap
Inconsistency between savings and investment
Rigid money wages

30. The multiplier
The marginal propensity to consume
The importance of aggregate demand

31. GLOBAL GRAMMAR: MACROECONOMIC POLICY
Business Cycles
Fiscal policy (G-T)
Monetary policy (interest rates)
Global Kronos Capitalism: Policies
IMF
WTO
World Bank and
EU policy

33. The Phillips curve