Financial Globalization

This article argues the transformations of the capitalism, looking for to point out them as resulted of the dialectic process of the laws of movement and reproduction of the value. In this direction, it is affirmed that the capitalist modifications moderns - associates to the productive reorganization, the financial globalization and the new paper of the national states - had

The article presents a verbal and mathematical model of medium-term business cycles (with a characteristic period of 7–11 years) known as Juglar cycles.
The model takes into account a number of approaches to the analysis of such cycles; in the meantime it also takes into account some of the authors' own generalizations and additions that are important for understanding the internal logic of the cycle, its variability and its peculiarities in the present-time conditions. The authors argue that the most important cause of cyclical crises stems from strong structural disproportions that develop during economic booms. These are not only disproportions between different economic sectors, but also disproportions between different societal subsystems; at present these are
also disproportions within the World System as a whole.
The proposed model of business cycle is based on its subdivision into four phases:
– recovery phase (which could be subdivided into the start sub-phase and the acceleration sub-phase);
– upswing/prosperity/expansion phase (which could be subdivided into the growth sub-phase and the boom/overheating sub-phase);
– recession phase (within which one may single out the crash/bust/acute crisis sub-phase and the downswing sub-phase);
– depression/stagnation phase (which we could subdivide into the stabilization sub-phase and the breakthrough sub-phase).
The article provides a detailed qualitative description of macroeconomic dynamics at all phases; it specifies driving forces of cyclical dynamics and
the causes of transition from one phase to another (including psychological causes); a special attention is paid to the turning point from the peak of over-heating to the acute crisis, as well as to the turning point from the downswing to recovery.
The proposed mathematical model of Juglar cycle takes into account the following effects that are typical for the market economy:
• positive feedbacks between various economic processes;
• presence of a certain inertia, time lags in reactions of the economic subsystem to the change in conditions;
• amplification by the financial subsystem of positive feedbacks and time lags in the economic subsystem;
• excessive reaction to changing conditions during the acute crisis sub-phase.
The authors suggest that the current crisis turns out to be rather similar to classical Juglar crises; however, there is also a significant difference, as the current crisis occurs at a truly global scale. Yet, due to this truly global scale of the current crisis, the possibilities of regulation with the national state's measures have turned out to be ineffective, whereas the suprastate regulation of financial processes hardly exists. It is shown that all these have led to the reproduction of the current crisis according to a classical Juglar scenario.

International political economy (IPE) has explained financial globalization as the result of states deciding to open up and liberalize domestic financial systems. Complementing this 'negative integration' view, we present a theory of financial globalization during the 1970s that emphasizes the importance of 'positive integration .' Credit money systems are characterized by public-private infrastructural entan-glements, the management of which require substantial institutional work by monetary technocrats, both at the domestic and at the international level. To illustrate our theory, we trace the expansion of the Eurodollar market during the 1970s. Drawing on archival records from the 'Standing Committee on the Euro-currency Market' at the Bank for International Settlements, we show how this group of G-10 central bankers sought to elevate the management of infrastructural entanglements from the domestic to the international level. By ensuring that the Eurodollar market did not interfere with domestic monetary governability, while seeking to provide protection for issuers of Eurodollars, monetary technocrats helped establish the institutional infrastructure for the expansion and globalization of the offshore US dollar system.

The article presents a verbal and mathematical model of medium-term business cycles (with a characteristic period of 7–11 years) known as Juglar cycles. The model takes into account a number of approaches to the analysis of such cycles; in the meantime it also takes into account some of the authors' own generalizations and additions that are important for understanding the internal logic of the cycle, its variability and its peculiarities in the present-time conditions. The authors argue that the most important cause of cyclical crises stems from strong structural disproportions that develop during economic booms. These are not only disproportions between different economic sectors, but also disproportions between different societal subsystems; at present these are also disproportions within the World System as a whole.
The proposed model of business cycle is based on its subdivision into four phases:
– recovery phase (which could be subdivided into the start sub-phase and the acceleration sub-phase);
– upswing/prosperity/expansion phase (which could be subdivided into the growth sub-phase and the boom/overheating sub-phase);
– recession phase (within which one may single out the crash/bust/acute crisis sub-phase and the downswing sub-phase);
– depression/stagnation phase (which we could subdivide into the stabilization sub-phase and the breakthrough sub-phase).
The article provides a detailed qualitative description of macroeconomic dynamics at all the phases; it specifies driving forces of cyclical dynamics and the causes of transition from one phase to another (including psychological causes); a special attention is paid to the turning point from the peak of overheating to the acute crisis, as well as to the turning point from the downswing to recovery.
The proposed mathematical model of Juglar cycle takes into account the following effects that are typical for the market economy:
•positive feedbacks between various economic processes;
•presence of a certain inertia, time lags in reactions of the economic subsystem to the change in conditions;
•amplification by the financial subsystem of positive feedbacks and time lags in the economic subsystem;
•excessive reaction to changing conditions during the acute crisis sub-phase.
The authors suggest that the current crisis turns out to be rather similar to classical Jug-lar crises; however, there is also a significant difference, as the current crisis occurs at
a truly global scale. Yet, due to this truly global scale of the current crisis, the possibilities of regulation with the national state's measures have turned out to be ineffective, whereas the suprastate regulation of financial processes hardly exists. It is shown that all these have led to the reproduction of the current crisis according to a classical Juglar scenario.