The Rise And Fall Of Money Manager Capitalism PDF Download

This dissertation investigates the relationship between what Hyman Minsky termed "money manager capitalism", to an increasingly global economy, where the transmission of financial and economic instability spreads rapidly across national borders. It has been recognized by economists outside of the mainstream schools of thought that the predominance of finance over all real sectors of the economy, the demise of traditional banking activities, and the rise of shadow banks and money managers coupled to the deregulation waves of the 1980s, 1990s and early 2000s, constitute the key ingredients in the "money manager capitalism" recipe for disaster. It will be argued that when combined with the process of financial globalization, the mixture becomes explosive - it caused the most severe global economic meltdown since the Great Depression. My thesis focuses on this last element. The central question is whether financial globalization is indeed beneficial and tantamount to global economic prosperity and stability - a view that has become widespread in the economics profession and international regulating institutions. The conclusion is the opposite - globalization of finance has brought about more prolonged, severe and recurring episodes of global financial instability in the new millennium. It reaches this conclusion by investigating the operation of internationally active banks, shadow banks and money managers in two main areas: Europe and the US, and developing and emerging markets. The financial systems of the developed world, mainly Europe and US, were at the epicenter of the 2007 global financial crises. The global creation of fictitious liquidity and the cross-border leveraging and layering of debt was behind the unprecedented increase in global liquidity and cross-border international flows - primary measures of financial globalization. Developing and emerging countries did not participated on the creation of liquidity for the development of money manager capitalist was in these areas is still incipient. However, they became the focus of institutional investor in the search for yields and increased appetite for risk. Consequently, even with strongly regulated financial systems those countries were engulfed by the financial euphoria and consequent collapse of global financial liquidity.