Subject: [OPE-L:1714] Re: is a crisis in the US economy immanent?
From: Gerald Levy (glevy@pratt.edu)
Date: Mon Nov 22 1999 - 16:13:40 EST
---------- Forwarded message ----------
Date: Mon, 22 Nov 1999 10:23:14 -0800
From: Akira MATSUMOTO <akiram@mail.ucr.edu>
Dear Jerry
Thank you for your difficult question. I'll still offer my opinion brevity
here. I sorry not to make a sufficient answer.
*One curious development is the extent to which the crisis in South Asian
markets and the banking crisis and recession in Japan have had on the
financial system in the US.
*What is your explanation for why these developments haven't had a sharper
(negative) impact on the US economy?
These seem to be the same question in a sense.
As you know, the recent Japanese recession caused from the burst of the
bubble economy. The outbreak of Japanese bubble economy should be considered
in relation to the international economy. But the burst of the bubble seemed
to be absolutly the domestic problem.
In view of the movement of the monetary capital in the world, the burst of
Japanese bubble has been the following wind for the US economy. Because the
inflows of monetary capital to the US, especially the stock market have been
supporting the US economic boom ("an asset effect").
The Asian market enjoyed some gains from the Japanese bubble burst
temporarily. The same movement of monetary capital from Japan prompted the
inflows of the US short term capitals. But this short term capitals has
seeked for the short term gain and been quick at runnnig away. Actualy they
were the greatest disturbance factor of the Asian crisis. This capital
return to home and support the stock boom in the US.
*If "globalization" is to be believed, shouldn't it be increasingly the case
that when major capitalist economies experience an economic crisis that
their major trading "partners" also experience economic crisis?
In the contemporary world economy the monetary capital apparently had not a
chain effection on the real economy like as prewar economy (the resemblance
of the effection were observed also by Susan Strang "MAD Money". But we
should take the following factors into account.
@the exsisting and the future of the Dollar system
@Emergence of the Euro economy
@Economic distress in the high performance area of Aisia (the difference
from Latin America and rewar-economy)
@Safty net of the International Organization.
We have some volatile factors in the world economy. How will these factors
pull the triger of the world economic adverse?
This is the very question to analyze.
At 3:20 PM -0800 99.11.19, Gerald Levy wrote:
> Re Akira's [OPE-L:1702]:
>
> Thank for for your response to the Henwood article.
>
> I am interested in knowing what your answer is to the question in the
> subject line (i.e. "is a crisis in the US economy immanent?")
>
> One curious development is the extent to which the crisis in South Asian
> markets and the banking crisis and recession in Japan have had on the
> financial system in the US. What is your explanation for why these
> developments haven't had a sharper (negative) impact on the US economy?
> If "globalization" is to be believed, shouldn't it be increasingly the
> case that when major capitalist economies experience an economic crisis
> that their major trading "partners" also experience economic crisis?
>
> In solidarity, Jerry
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MATSUMOTO, Akira
Visiting Scholar
Department of Economics,
University of California, Riverside
1150 University Avenue
Riverside, CA 92521-0427 USA
Phone 909-787-5037x1575 or X1570
Fax 909-787-5685
Email: akiram@mail.ucr.edu
________________________
Associate Professor on Money and Banking
Department of Comprehensive Policy Making
Faculty of Law & Letters
EHIME University
Matsuyama, Ehime
790-8577, Japan
Tel:+81-89-927-9237(office)
FaX: +81-89-927-8916
E-mail: amatsu@ll.ehime-u.ac.jp
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