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Introduction : how multi-level finance has contributed to the crisis and is affected by it
| Content Provider | Semantic Scholar |
|---|---|
| Author | Ahmad, Ehtisham Bordignon, Massimo Brosio, Giorgio |
| Copyright Year | 2015 |
| Abstract | The financial crisis that swept the world economy in 2008 has produced some paradoxical results that would have been impossible to predict, and indeed were not predicted, at the time. The European Union compact was based on principles of economic and political integration. However, sustainability entailed adherence to fiscal rules at national and subnational levels together with the assumption that national governments would have the incentive and ability to implement them. It also assumed that subnational entities would have an incentive to comply with the broad directions of the European compact, and how they managed their affairs was largely their business. The financial crisis exposed several limitations inherent in those assumptions, particularly the futility of fiscal rules in the face of poor information flows on liabilities at the subnational level as well as stateowned enterprises. These have permitted the effective buildup of risks to the overall macroeconomic framework that in many cases had become unsustainable. The 2008 crisis originated in the US as a result – with the benefit of hindsight – of overly generous monetary policy and poor regulation of the financial markets and of the banking sector. Many scholars at the time thought that the crisis meant the end of the marketstyle, financially ruled, deregulated AngloSaxon capitalism. Indeed, at the outset of the crisis, most continental European leaders dismissed it as essentially a problem for the US, and presented it as a clear proof of the superiority of the more socially oriented European market system. yet, almost a decade later, it appears clear that the adjustment in Europe is far from complete, and there is increasing resistance to the cuts in employment, public services and living standards that the adjustment may require. The needed adjustments |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://www.elgaronline.com/downloadpdf/9781784715106.00005.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
