Demographic Instability as a Barrier to Remote Economic Development in the North: Are Cities the Answer?

Remote and sparsely populated northern peripheries in Australia, Europe and North America experience high rates of population turnover and struggle to recruit and retain populations. There has been discussion about the extent to which their larger urban centres may be key to navigating common ‘boom and bust’ cycles, thus contributing to more stable and resilient demographic and economic development in their jurisdictions. This paper examines the population development in twelve remote northern jurisdictions dominated by a large city, comparing urban and regional growth patterns around periods of economic boom and bust since 1990. It was expected that periods of high population growth would be initially led by regional areas where resource projects are commonly located, but that the cities would ultimately benefit more from high growth periods and suffer less from periods of low population growth. It was also expected that cities would retain key populations better than regions because of a growing global urban preference. Results suggest that regional areas did grow more at the start of high growth periods, but there was no universal experience of higher city growth throughout the two boom and bust cycles. Rather, each city and region had unique growth pattern properties. Cities must not be assumed a priori to be the drivers of demographic development, but attention needs to be paid to what types of cities promote less volatile growth and development potential in the regions.

International Capital Flows

International capital flows have challenged economists’ models for decades. They exhibit a number of patterns that standard economic theories have struggled to explain. Over time, global capital flows go through boom and bust cycles, sudden stops, and unprecedented bonanzas. Determinants of capital flows include “pull factors,” recipient countries’ economic and structural characteristics, and “push factors” or “global factors,” which mostly depend on the global financial cycle and U.S. monetary policy. The relative importance of global factors has increased since the early 2000s. The rise in international capital flows that has accompanied the wave of globalization in the early 21st century has helped to deliver crucial capital resources that facilitated development of many economies and helped transmit technologies across borders. On the flip side, international capital flows also increased transmission of financial shocks and policy changes across countries, most prominently experienced during the global financial crisis of 2008–2009. On balance, is it beneficial for small open economies to allow for free capital flows? Mainstream economists’ and policymakers’ answer to this question has evolved from an unequivocal “yes” to a much more nuanced view.

Capital Controls: Theory and Evidence

This paper synthesizes recent advances in the theoretical and empirical literature on capital controls. We start by observing that international capital flows have both benefits and costs, but some of these are not internalized by individual actors and thus constitute externalities. The theoretical literature has identified pecuniary externalities and aggregate demand externalities that respectively contribute to financial instability and recessions. These externalities provide a natural rationale for countercyclical capital controls that lean against boom and bust cycles in international capital flows. The empirical literature has developed several measures of capital controls to capture different aspects of capital account openness. We evaluate the strengths and weaknesses of different measures and provide an overview of the empirical findings on the effectiveness of capital controls in addressing the externalities identified by the theory literature, that is, in reducing financial fragility and enhancing macroeconomic stability. We also discuss strategies to deal with the endogeneity of capital controls in such statistical exercises. We conclude by providing an overview of the historical and current debates on the role of capital controls in macroeconomic management and their relationship to the academic literature. (JEL D62, F32, F33, F38, F44)

The Incoming Revolution in the World Banking and Financial System

Manifold and ongoing developments seem to hint that humanity is just ahead of historic shifts in global banking as well as the financial system. The landmark changes at this moment are unavoidable. The ultra-loose monetary policies practiced by the leading central banks in recent years for a record-breaking period have not resulted in a permanent enhancement of the global economic situation but barely extended the inevitable agony of the current global financial system for additional several years. The COVID-19 pandemic and resultant global economic crisis only made things worse. These simple facts beg the following questions: what future global financial system would probably look like? What currency is going to substitute the role hitherto fulfilled by the crumbling U.S. dollar? How painful the upcoming giant changes will be for societies? What the incoming revolution in geo-economics will mean for geopolitics? Unfortunately, financial boom and bust cycles are not the thing of the past but rather seem to be inextricably linked to the way the modern financial system works. This decisively needs to be reformed. The harbingers of epochal changes are on the horizon. The author will describe them in the paper.

Latin America risks another lost decade

Significance The health crisis, national lockdowns and a global recession have combined to create a difficult environment in Latin America, while governments’ responses to the pandemic have been uneven. The region is once again repeating its history of boom-and-bust cycles and risks experiencing a lost decade similar to the 1980s. Impacts Income polarisation will increase, with a simultaneous rise in poverty and concentration of wealth at the top. Regional collaboration is unlikely due to lack of political leadership and ideological differences. While a Biden presidency might take a more cooperative line, Latin America will receive little US attention whatever the election outcome.

Introduction

Universal banks arose in the U.S. during two periods in the past century—the 1920s and the late 1990s. On both occasions, universal banks in the U.S. and Europe promoted intense boom-and-bust cycles that led to global calamities—the Great Depression of the early 1930s and the Great Recession of 2007–09. Universal banks received extensive bailouts on both sides of the Atlantic during both crises. Three core features of universal banks cause them to generate destructive boom-and-bust cycles. First, pervasive conflicts of interest prevent them from acting as objective lenders or as impartial investment advisers. Second, bonus-driven cultures encourage their insiders to take speculative risks to produce short-term profits. Third, their ability to convert loans into asset-backed securities allows them to package risky loans into securities sold as purportedly “safe” investments to poorly informed investors. The Glass-Steagall Act of 1933 broke up universal banks and established structural buffers that prevented spillovers of risk between the banking system and other financial sectors. The U.S. avoided systemic financial crises after World War II until Glass-Steagall was undermined by regulators and ultimately repealed by Congress. Congress failed to adopt similar structural reforms after the Great Recession. As a result, universal banks continue to dominate our financial markets and pose unacceptable systemic dangers. We urgently need a new Glass-Steagall Act to break up universal banks again and restore a more stable and resilient financial system.

The Crumble in the Jungle: The London Financial Press and the Boom-and-Bust Cycles of the Ashanti Goldfields Corporation, 1895–1914

In this article, we study the role that media plays during a speculative bubble on an emerging market, and in particular the London financial press’s relation to the West African mining bubble of the early twentieth century. The focus is on the leading company in this sector at the time, Ashanti Goldfields Corporation. The London financial press lacked access to independent, reliable information on the ground, so it often failed to provide readers with relevant factual information. In some instances, the press might have even fueled the speculative cycles through the reporting it provided.

Ecology: A Very Short Introduction

Ecology is the science of how organisms interact with each other and their environment to form communities and ecosystems. Ecology: A Very Short Introduction explains the history of ecology, the principles of ecological thinking, how ecology affects our everyday lives, and how it guides environmental decisions, especially in the light of current and future environmental challenges. What are the factors behind ‘boom and bust’ cycles in species populations? How and why do two species cooperate? Do humans need so many species? The cultural significance of ecology is also explored, with examples of different schools of thought that envisage ecology as a science and a worldview.

Life on the fence line. Early 20th-century life in Ross Acreage

Despite widespread attention to the recent past as an archaeological topic, few archaeologists have attended to the particular social and ecological stakes of one of the most defining material features of contemporary life: the long-term effects of toxic industrial waste. Identifying the present era as the high Capitalocene, this article highlights the contemporary as a period caught between the boom-and-bust cycles of capitalist production and the persistence of industrial waste. Drawing on an archaeological case study from Edmonton, Alberta, we outline how the working-class shanty town community of Ross Acreage (occupied 1900–1950) was formed in relation to the industrial waste that suffused its landscape. Drawing on data from both archaeological excavation and environmental testing, this article argues that the community of Ross Acreage was defined materially by its long-term relationship with industrial waste, what we term a ‘fence-line community’.