Pub Date : 2022-10-17DOI: 10.1177/10245294221133534
Viktor Skyrman
Departing from the Regulation Approach and the concept of spatio-temporal fixes, this article analyses how different mechanisms of financialization have ameliorated and accelerated crisis-tendencies in the North European forest industry and its implications for labour, suppliers and corporate R&D. Although wood products can potentially ameliorate the climate crisis by substituting plastics, petrochemicals, polyester and various other applications from fossils, firms have been slow to advance into these higher value-added segments. Instead, under an increasingly financialized accumulation regime, innovation has been undermined through R&D downsizing while dividends have been increased to shareholders at labour’s expense. Meanwhile, amid ultra-low interest rates, the industry’s profitability has been supported by appreciating forest assets that are increasingly treated as a new financial asset class by the financial sector. Evidently, while some mechanisms of financialization are detrimental to firms, the financialization of forests has constituted a profitability-enhancing socioecological fix (McCarthy, 2015; Ekers & Prudham, 2017) not only for financial capital (Ekers, 2019) but also for non-financial firms themselves. In the long run, however, it is highly uncertain if forest asset prices can be kept from depreciating amid the problems of profitability, weakened ecological carrying capacity, rising interest rates and strained supplier relations.
{"title":"Industrial restructuring, spatio-temporal fixes and the financialization of the North European forest industry","authors":"Viktor Skyrman","doi":"10.1177/10245294221133534","DOIUrl":"https://doi.org/10.1177/10245294221133534","url":null,"abstract":"Departing from the Regulation Approach and the concept of spatio-temporal fixes, this article analyses how different mechanisms of financialization have ameliorated and accelerated crisis-tendencies in the North European forest industry and its implications for labour, suppliers and corporate R&D. Although wood products can potentially ameliorate the climate crisis by substituting plastics, petrochemicals, polyester and various other applications from fossils, firms have been slow to advance into these higher value-added segments. Instead, under an increasingly financialized accumulation regime, innovation has been undermined through R&D downsizing while dividends have been increased to shareholders at labour’s expense. Meanwhile, amid ultra-low interest rates, the industry’s profitability has been supported by appreciating forest assets that are increasingly treated as a new financial asset class by the financial sector. Evidently, while some mechanisms of financialization are detrimental to firms, the financialization of forests has constituted a profitability-enhancing socioecological fix (McCarthy, 2015; Ekers & Prudham, 2017) not only for financial capital (Ekers, 2019) but also for non-financial firms themselves. In the long run, however, it is highly uncertain if forest asset prices can be kept from depreciating amid the problems of profitability, weakened ecological carrying capacity, rising interest rates and strained supplier relations.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"748 - 769"},"PeriodicalIF":3.9,"publicationDate":"2022-10-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47365688","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-16DOI: 10.1177/10245294221131942
Joanna Wolszczak-Derlacz, D. Nikulin, Sabina Szymczak
This study examines whether, and how, differences in wage bargaining schemes shape the relationship between global value chains (GVCs) and the wages of workers while considering both GVC participation and position in GVC. Our dataset is derived from the European Structure of Earnings Survey (SES), containing employee–employer data from 18 European countries, merged with sectoral data from the World Input-Output Database (WIOD). The results of an augmented Mincer-type regression show that under national and industry wage bargaining schemes, greater participation in GVCs is associated with lower wages, whereas no adverse impact from GVCs is observed for workers under enterprise bargaining schemes. Finally, numerous extensions and instrumental variable estimations confirm that the type of collective pay agreement may alter the response of wages to both GVC participation and position.
{"title":"Global value chains and wages under different wage setting mechanisms","authors":"Joanna Wolszczak-Derlacz, D. Nikulin, Sabina Szymczak","doi":"10.1177/10245294221131942","DOIUrl":"https://doi.org/10.1177/10245294221131942","url":null,"abstract":"This study examines whether, and how, differences in wage bargaining schemes shape the relationship between global value chains (GVCs) and the wages of workers while considering both GVC participation and position in GVC. Our dataset is derived from the European Structure of Earnings Survey (SES), containing employee–employer data from 18 European countries, merged with sectoral data from the World Input-Output Database (WIOD). The results of an augmented Mincer-type regression show that under national and industry wage bargaining schemes, greater participation in GVCs is associated with lower wages, whereas no adverse impact from GVCs is observed for workers under enterprise bargaining schemes. Finally, numerous extensions and instrumental variable estimations confirm that the type of collective pay agreement may alter the response of wages to both GVC participation and position.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"809 - 829"},"PeriodicalIF":3.9,"publicationDate":"2022-10-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45803287","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-06DOI: 10.1177/10245294221132608
Aldo Madariaga
{"title":"Book review: Global Production, National Institutions, and Skill Formation: The Political Economy of Training and Employment in Auto Parts Suppliers from Mexico and Turkey","authors":"Aldo Madariaga","doi":"10.1177/10245294221132608","DOIUrl":"https://doi.org/10.1177/10245294221132608","url":null,"abstract":"","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"656 - 658"},"PeriodicalIF":3.9,"publicationDate":"2022-10-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43758547","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-30DOI: 10.1177/10245294221130119
Joscha Abels, H. Bieling
In the emerging triad competition between the US, China and the EU, the control over infrastructures is increasingly contested. This paper asks how this conflict of connectivity influences the EU’s infrastructure policy and what specific factors play a role when translating these global shifts into strategies. We develop a political-economic perspective that highlights the relevance of infrastructures for capitalist production and the pattern of dependencies between actors. Viewing the triad competition in infrastructural terms, we argue that the EU is in the process of becoming a geopolitically and geoeconomically oriented infrastructural policy actor. Two cases in the field of high-tech infrastructure are studied more deeply: the EU’s development of the satellite navigation system Galileo and its strategy on 5G. They show that – despite the EU’s geoeconomic approach – the particular mode of global competition in combination with internal political factors can hinder the translation of geoeconomic ambitions into specific policies.
{"title":"Infrastructures of globalisation. Shifts in global order and Europe’s strategic choices","authors":"Joscha Abels, H. Bieling","doi":"10.1177/10245294221130119","DOIUrl":"https://doi.org/10.1177/10245294221130119","url":null,"abstract":"In the emerging triad competition between the US, China and the EU, the control over infrastructures is increasingly contested. This paper asks how this conflict of connectivity influences the EU’s infrastructure policy and what specific factors play a role when translating these global shifts into strategies. We develop a political-economic perspective that highlights the relevance of infrastructures for capitalist production and the pattern of dependencies between actors. Viewing the triad competition in infrastructural terms, we argue that the EU is in the process of becoming a geopolitically and geoeconomically oriented infrastructural policy actor. Two cases in the field of high-tech infrastructure are studied more deeply: the EU’s development of the satellite navigation system Galileo and its strategy on 5G. They show that – despite the EU’s geoeconomic approach – the particular mode of global competition in combination with internal political factors can hinder the translation of geoeconomic ambitions into specific policies.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"516 - 533"},"PeriodicalIF":3.9,"publicationDate":"2022-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46183414","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-18DOI: 10.1177/10245294221125850
Franco Galdini
This article analyses the ‘backward’ form of import-substitution industrialisation (ISI) in countries integrated into the global economy as exporters of primary commodities, using the example of the car industry in Uzbekistan. This form of incorporation defines the way in which all manufacturing capitals, regardless of ‘nationality’, accumulate at the average rate of profit via raw material rents, as mediated by specific state policies. This has been the case of Uzbekistan’s state-owned car manufacturer UzAvtoSanoat, in joint-venture with Korean Daewoo Motor Company and American General Motors in the 1992–2016 period. Orthodox (‘neoliberal’) economists view the Uzbek car industry as inefficient due to state intervention. Heterodox (‘developmental state’) scholars hail it as an example of export-oriented industrial upgrading. Neither explain, however, why leading MNCs would invest in such an inefficient market (as per the former), given its low scale of production that is mostly purchased domestically (pace the latter). Instead, I contend that all manufacturing capitals in the country could stay profitable only via rent subsidisation, the main reason for leading MNCs to invest in it. As such, ‘backward’ manufacturing ISI in Uzbekistan epitomises a specific national form taken by the global process of capital accumulation in resource-rich countries of the Global South.
{"title":"‘Backward’ industrialisation in resource-rich countries: The car industry in Uzbekistan","authors":"Franco Galdini","doi":"10.1177/10245294221125850","DOIUrl":"https://doi.org/10.1177/10245294221125850","url":null,"abstract":"This article analyses the ‘backward’ form of import-substitution industrialisation (ISI) in countries integrated into the global economy as exporters of primary commodities, using the example of the car industry in Uzbekistan. This form of incorporation defines the way in which all manufacturing capitals, regardless of ‘nationality’, accumulate at the average rate of profit via raw material rents, as mediated by specific state policies. This has been the case of Uzbekistan’s state-owned car manufacturer UzAvtoSanoat, in joint-venture with Korean Daewoo Motor Company and American General Motors in the 1992–2016 period. Orthodox (‘neoliberal’) economists view the Uzbek car industry as inefficient due to state intervention. Heterodox (‘developmental state’) scholars hail it as an example of export-oriented industrial upgrading. Neither explain, however, why leading MNCs would invest in such an inefficient market (as per the former), given its low scale of production that is mostly purchased domestically (pace the latter). Instead, I contend that all manufacturing capitals in the country could stay profitable only via rent subsidisation, the main reason for leading MNCs to invest in it. As such, ‘backward’ manufacturing ISI in Uzbekistan epitomises a specific national form taken by the global process of capital accumulation in resource-rich countries of the Global South.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"615 - 634"},"PeriodicalIF":3.9,"publicationDate":"2022-09-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46948350","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-14DOI: 10.1177/10245294221127360
I. Lovering
This article analyses the EU’s Stability and Growth Pact (SGP) to challenge interpretations of neoliberalism as an international project. The fiscal rules of the SGP are a paradigmatic example of how neoliberalism uses constitutional techniques to put limits on national democracy. These rules, however, have never worked as intended with adherence having been the exception rather than the norm. Although scholars readily admit neoliberal rules misfire in practice, conceptualisations of neoliberalism have remained largely unscathed. In contrast, this article argues that techniques of budgetary planning have had a more crucial impact on neoliberal fiscal governance than legal rules. In the case of the SGP, supranational actors have been empowered not by their capacity to put constitutional limits on public expenditure, but by analysing and intervening in the purposes and uses of public finance through managerial techniques of budgetary planning. In making this argument, I argue that neoliberal rules matter to international fiscal governance only through their failure. Instead, supranational institutions have been empowered in the neoliberal era through a managerial reformatting of governance.
{"title":"EU fiscal governance and the managerial reformatting of neoliberal constitutionalism","authors":"I. Lovering","doi":"10.1177/10245294221127360","DOIUrl":"https://doi.org/10.1177/10245294221127360","url":null,"abstract":"This article analyses the EU’s Stability and Growth Pact (SGP) to challenge interpretations of neoliberalism as an international project. The fiscal rules of the SGP are a paradigmatic example of how neoliberalism uses constitutional techniques to put limits on national democracy. These rules, however, have never worked as intended with adherence having been the exception rather than the norm. Although scholars readily admit neoliberal rules misfire in practice, conceptualisations of neoliberalism have remained largely unscathed. In contrast, this article argues that techniques of budgetary planning have had a more crucial impact on neoliberal fiscal governance than legal rules. In the case of the SGP, supranational actors have been empowered not by their capacity to put constitutional limits on public expenditure, but by analysing and intervening in the purposes and uses of public finance through managerial techniques of budgetary planning. In making this argument, I argue that neoliberal rules matter to international fiscal governance only through their failure. Instead, supranational institutions have been empowered in the neoliberal era through a managerial reformatting of governance.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"534 - 550"},"PeriodicalIF":3.9,"publicationDate":"2022-09-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41344641","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article explores the rise of digital platforms for insurance coverage related to the financial inclusion agenda in developing and emerging economies. The current literature focuses mostly on the emergence and implications of Superplatforms based in core capitalist economies. Combining insights from studies on platform capitalism with post/decolonial scholarship in international political economy, we argue that the rise of inclusive insurance supported by platforms relies on three dimensions of what we term datanalysing: (a) an interoperable and safe digital infrastructure legitimized by international standards; (b) the collection of racially hierarchized data; and (c) the appropriation of data by objectifying the targeted individuals. As datanalysing turns populations from the Global South into profitable resources from which extracting financial value, it sustains colonial practices censing and classifying subjugated populations. We illustrate our argument with the case of motor insurance coverage. Our analysis offers a wider empirical understanding of the global expansion of platform capitalism to previously unmarketable populations. We suggest that research should place greater emphasis on socio-historical dimensions to highlight the inconsistent and exploitative character of the inclusive insurance agenda.
{"title":"Datanalysing the uninsured: The coloniality of inclusive insurance platforms","authors":"Yannick Perticone, Jean-Christophe Graz, Kunz Rahel","doi":"10.1177/10245294221125849","DOIUrl":"https://doi.org/10.1177/10245294221125849","url":null,"abstract":"This article explores the rise of digital platforms for insurance coverage related to the financial inclusion agenda in developing and emerging economies. The current literature focuses mostly on the emergence and implications of Superplatforms based in core capitalist economies. Combining insights from studies on platform capitalism with post/decolonial scholarship in international political economy, we argue that the rise of inclusive insurance supported by platforms relies on three dimensions of what we term datanalysing: (a) an interoperable and safe digital infrastructure legitimized by international standards; (b) the collection of racially hierarchized data; and (c) the appropriation of data by objectifying the targeted individuals. As datanalysing turns populations from the Global South into profitable resources from which extracting financial value, it sustains colonial practices censing and classifying subjugated populations. We illustrate our argument with the case of motor insurance coverage. Our analysis offers a wider empirical understanding of the global expansion of platform capitalism to previously unmarketable populations. We suggest that research should place greater emphasis on socio-historical dimensions to highlight the inconsistent and exploitative character of the inclusive insurance agenda.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"594 - 614"},"PeriodicalIF":3.9,"publicationDate":"2022-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41884256","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-05DOI: 10.1177/10245294221124298
Alfredo del Río Casasola, M. Paz
The Great Recession has highlighted striking inequalities within the European Union, necessitating an approach that permits clear understanding of their nature and scope. To this end, this article relies on the Structuralist centre-periphery (C-P) literature, meanwhile seeking to update the validity of C-P analysis in a context of international fragmentation of production. Following a critical review of the relevant literature, that permits us to connect Structuralist theories with the GVC literature, we propose an analysis of the comparative evolution of productivity and wages, focussing on the transport equipment sector. The empirical analysis shows that convergence between centre and periphery has been higher in productivity than in wages, given that the productivity gains of central economies have been transferred to wages to a greater extent than in peripheral economies. This dynamic has been accentuated since the crisis erupted, as wages in the central and peripheral economies have diverged, fomenting greater polarization.
{"title":"Centre-periphery in the European Union: Analysis of wages and productivity in the transport equipment sector","authors":"Alfredo del Río Casasola, M. Paz","doi":"10.1177/10245294221124298","DOIUrl":"https://doi.org/10.1177/10245294221124298","url":null,"abstract":"The Great Recession has highlighted striking inequalities within the European Union, necessitating an approach that permits clear understanding of their nature and scope. To this end, this article relies on the Structuralist centre-periphery (C-P) literature, meanwhile seeking to update the validity of C-P analysis in a context of international fragmentation of production. Following a critical review of the relevant literature, that permits us to connect Structuralist theories with the GVC literature, we propose an analysis of the comparative evolution of productivity and wages, focussing on the transport equipment sector. The empirical analysis shows that convergence between centre and periphery has been higher in productivity than in wages, given that the productivity gains of central economies have been transferred to wages to a greater extent than in peripheral economies. This dynamic has been accentuated since the crisis erupted, as wages in the central and peripheral economies have diverged, fomenting greater polarization.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"575 - 593"},"PeriodicalIF":3.9,"publicationDate":"2022-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42177973","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-08-16DOI: 10.1177/10245294221120986
J. Copley
Meeting the Paris climate goals requires the global economy’s urgent decarbonization. States and intergovernmental bodies insist that this should be pursued via a tremendous spike in private investment in renewable power – encouraged and coordinated by states. However, this renewable investment boom will have to swim against the current of the stagnation of the world economy since the 1970s, characterized by weak rates of investment and growth. Undertaking decarbonization in this context presents unique political economy dilemmas. Firstly, although slow growth helps to reduce carbon emissions by lowering energy use, it simultaneously impedes energy efficiency gains. Secondly, the stagnant state of global industry militates against its adoption of expensive decarbonized industrial processes. Thirdly, while most renewable power sources have failed to attract sufficient investment, those that have expanded rapidly – particularly solar photovoltaic – have tended to exhaust their growth potential due to falling prices and profitability. Finally, economic stagnation has destabilized political institutions, exerting pressures on governments to stimulate growth regardless of the environmental implications. States must navigate these intractable dilemmas as they strategize to decarbonize the downturn.
{"title":"Decarbonizing the downturn: Addressing climate change in an age of stagnation","authors":"J. Copley","doi":"10.1177/10245294221120986","DOIUrl":"https://doi.org/10.1177/10245294221120986","url":null,"abstract":"Meeting the Paris climate goals requires the global economy’s urgent decarbonization. States and intergovernmental bodies insist that this should be pursued via a tremendous spike in private investment in renewable power – encouraged and coordinated by states. However, this renewable investment boom will have to swim against the current of the stagnation of the world economy since the 1970s, characterized by weak rates of investment and growth. Undertaking decarbonization in this context presents unique political economy dilemmas. Firstly, although slow growth helps to reduce carbon emissions by lowering energy use, it simultaneously impedes energy efficiency gains. Secondly, the stagnant state of global industry militates against its adoption of expensive decarbonized industrial processes. Thirdly, while most renewable power sources have failed to attract sufficient investment, those that have expanded rapidly – particularly solar photovoltaic – have tended to exhaust their growth potential due to falling prices and profitability. Finally, economic stagnation has destabilized political institutions, exerting pressures on governments to stimulate growth regardless of the environmental implications. States must navigate these intractable dilemmas as they strategize to decarbonize the downturn.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"429 - 448"},"PeriodicalIF":3.9,"publicationDate":"2022-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49289252","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-08-15DOI: 10.1177/10245294221118661
Steffen Murau, Fabian Pape, Tobias Pforr
The notion that the international monetary system is hierarchical has become increasingly common, but the nature, causes, and shape of international monetary hierarchy remain vague. In this article, we develop a monetary theory of international hierarchy based on the “key currency” approach. We perceive the international monetary system as a world-spanning payment system that is inherently hierarchical because it needs central nodes for clearing and settlement. The centrality of the US-Dollar (USD) as global key currency places the US at the apex and makes the Federal Reserve (Fed) the system’s hierarchically highest institution. Other monetary jurisdictions are pushed into peripheral positions and rely on both using and creating USD-denominated credit money instruments “offshore.” Based on this approach, we explain international monetary hierarchy through different mechanisms to supply emergency USD liquidity from the Fed to non-US central banks. Currently, there are three different public mechanisms for non-US central banks to access the Fed’s balance sheet and attain emergency USD liquidity. The first-layer periphery may receive emergency USD liquidity via the Fed’s central bank swap lines. The second-layer periphery can make use of the Fed’s new repo facility for Foreign and International Monetary Authorities to access emergency USD liquidity. The residual mechanism for the third-layer periphery to access emergency USD liquidity is the Special Drawing Rights system, administered by the International Monetary Fund, in which the Exchange Stabilization Fund acts as gatekeeper for the Fed.
{"title":"International monetary hierarchy through emergency US-dollar liquidity: A key currency approach","authors":"Steffen Murau, Fabian Pape, Tobias Pforr","doi":"10.1177/10245294221118661","DOIUrl":"https://doi.org/10.1177/10245294221118661","url":null,"abstract":"The notion that the international monetary system is hierarchical has become increasingly common, but the nature, causes, and shape of international monetary hierarchy remain vague. In this article, we develop a monetary theory of international hierarchy based on the “key currency” approach. We perceive the international monetary system as a world-spanning payment system that is inherently hierarchical because it needs central nodes for clearing and settlement. The centrality of the US-Dollar (USD) as global key currency places the US at the apex and makes the Federal Reserve (Fed) the system’s hierarchically highest institution. Other monetary jurisdictions are pushed into peripheral positions and rely on both using and creating USD-denominated credit money instruments “offshore.” Based on this approach, we explain international monetary hierarchy through different mechanisms to supply emergency USD liquidity from the Fed to non-US central banks. Currently, there are three different public mechanisms for non-US central banks to access the Fed’s balance sheet and attain emergency USD liquidity. The first-layer periphery may receive emergency USD liquidity via the Fed’s central bank swap lines. The second-layer periphery can make use of the Fed’s new repo facility for Foreign and International Monetary Authorities to access emergency USD liquidity. The residual mechanism for the third-layer periphery to access emergency USD liquidity is the Special Drawing Rights system, administered by the International Monetary Fund, in which the Exchange Stabilization Fund acts as gatekeeper for the Fed.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"495 - 515"},"PeriodicalIF":3.9,"publicationDate":"2022-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45620486","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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