The US-Japanese Axis: Unity or Rivalry?
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In the wake of the East Asian economic turmoil, the international financial system has experienced a severe crisis. The aim of this chapter is to articulate several hypotheses about the dynamics and historical causes of this phase of instability in the world capitalist system and highlight some of the more critical developments, which could hasten a global economic slump. Since the outbreak of the Asian economic crisis in early 1997, Russia and Latin America have succumbed to the “contagion” effect. Despite the impending threat to trade and investment as a result of the slump that is now engulfing these emerging markets, Wall Street has continued its irrational exuberance. Yet the evidence suggests that the problem of global excess capacity has not been resolved, while commodity prices have not fully recovered from their historic lows.
KeywordsForeign Direct Investment Current Account Deficit Nonperforming Loan Trade Surplus Effective Demand
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