Suchergebnisse

Economic globalization never proceeded in a smooth steady trajectory. The current international economy, organized around liberal principles, faces potential problems unleashed by the COVID-19 pandemic. Two popular theoretical approaches offer varying reasons for the survivability of the contemporary order. One stresses the benefits associated with participating in liberal international orders, claiming such arrangements are essentially self-sustaining. The rival view emphasizes the uneven distribution of gains, emphasizing the role of leadership, especially for dampening crises. To examine the support for each argument, I examine the evolution of international monetary arrangements. International monetary orders lie at the heart of liberal international economies; no prior liberal monetary order has proven self-sustaining. Liberal international monetary sub-orders depend upon leadership as much as cooperation for their survival—leaders exert efforts to shape followers' actions so long as the leader draws sufficient benefits to make such efforts worthwhile. The economic disruption caused by the COVID-19 pandemic provides the latest illustration of this point, though these arguments also suggest experiences across issue-areas will vary.

A standard labour contract has two important components, agreed upon wage from principal and efforts that in return is provided by agent. On one hand both principal and agent have full knowledge of wage, while information on provided effort level is always incomplete due to its abstract nature. Principal can only observe output of agent, which is joint function of effort, skill level and work environment [Green (1992)]. Assuming economic agents strictly follow their material gain, the game theoretic model predicts that agent will utilise minimum possible effort level. Similarly, the principal will pay minimum wages, since additional wages cannot extract additional effort. In contrast, the gift exchange model (GEM) is based on the critical assumption that reciprocal behaviour creates a positive relationship between wages and workers' effort levels [Akerlof (1982, 1984)]. Workers are assumed to reciprocate higher wage levels from firms by increasing their effort (positive reciprocity) and /or by decreasing their effort in retaliation for low wage (negative reciprocity). In labour market as partial gift exchange, the loyalty of workers is exchanged for higher wage, and this loyalty then can be translated to higher productivity through effective management. Experimental evidence has supported the reciprocity hypothesis both in laboratory [Fehr and Falk (2008); Fehr, et al. (1993); Fehr and Tougareva (1995); Fehr and Falk (1999); Fehr, et al. (1998); Fehr, Gächter, and Kirchsteiger (1997)] and in the field [Falk (2007); Henning- Schmidt, et al. (2005); Bellemare and Shearer (2007)].

In 2019 the doctrine, called "Modern Monetary Theory" (MMT), broke into the political Olympus. Political, academic and financial circles in the USA, the United Kingdom and Australia are actively discussing what was previously unthinkable: the budget deficit does not matter, the money printing is able to close the gap between government spending and taxes without inflation pressuring and other well-known ideas presented in a new light. The strict criticism of MMT was voiced by the economists of all kinds, from Kenneth Rogoff and Lawrence Summers from Harvard University to Paul Krugman from the City University of New York. All of them claim that under the mask of a new theory simple left populism is hidden. Representatives of MMT believe that when their supporters win in the upcoming elections in the USA, they will open a new page in the history of economics and politics.