The Law of Unintended Deregulation Consequences
I have been critical of the Globe‘s business reporting practices in the past (especially its tendency to quote Bank economists as “objective” observers of economic events) but on Saturday, it ran one of the best business pieces I’ve read in a long time.
The article, titled “Who is responsible for the global food crisis?” is a solid and thorough piece of investigative journalism that shines a bright and much needed light on the role deregulation has played in driving the current increase in food prices.
It also dovetails nicely into some important research into the financialization of our economy. Our own Jim Stanford has written about this in the past but there is also some excellent, and more recent work, being done by German Post-Keynesians on this topic.Â For those interested, I strongly recommend reading the recent (somewhat technical) working paper by Eckhard Hein (Vienna University of Economics & B.A.), which does a nice review of the literature and which shows how (with the help of Kaleckian models) the financialization process tends to be unstable in the medium to long run.