The Federal Reserve (the Fed) is responsible for monitoring, analyzing and ultimately stabilizing US financial markets. It also has unrivalled access to relevant economic data, high-level connections to financial institutions, and a large staff of professionally trained economists. What did the Fed know about subprime mortgage lending, securitization, and derivatives trading that are now widely recognized to have caused the 2008 financial crisis? Using a wide range of Fed documents from the precrisis period, particularly the transcripts of meetings of the policymaking Federal Open Market Committee (FOMC), the paper shows that Fed policymakers and staff were aware of these developments, but largely ignored them. Drawing on literatures in economics, political science and sociology, the paper then considers four hypotheses for explaining this puzzle: (1) 'capture' by financial interests; (2) Alan Greenspan's free-market ideology; (3) reliance on unrealistic economic models; and (4) institutional inertia and organizational routines. The paper argues that ideology and economic models contributed to the Fed's lack of concern, but in more complex ways than often thought, and that institutional routines played a crucial role.
The size of national delegations at the most critical intergovernmental climate change conferences—the annual gatherings of the Conference of the Parties (COPs) of the United Nations Framework Convention on Climate Change—vary greatly. The literature has emphasized the importance of national delegation size (NDS) for states’ formal and informal participation in climate change negotiations. To our knowledge, however, this is the first paper to comprehensively examine the determinants of NDS from 1995–2015. The findings highlight a country's resources and its interest in the mitigation of fossil fuel emissions as important determinants of its NDS. In contrast, the evidence for a connection between vulnerability to climate change and NDS is limited. Interest group politics appear more important than civil society or bureaucratic influence in determining NDS. In terms of policy implications, the distance between the country and the COP location is a robust deterrent of larger delegations, and there is a nonlinear relationship between NDS and financial capacity. Further, there are differences across Annex I and non-Annex I countries.
What is the relationship between states' economic power and their formal political power in multilateral economic institutions? Why do we see variation in states' formal political power across economic institutions of the same era? In this book, Ayse Kaya examines these crucial under-explored questions, drawing on multiple theoretical traditions within international relations to advance a new approach of 'adjusted power'. She explains how the economic shifts of our time, marked by the rise of Brazil, Russia, India, China and other emerging economies, have affected and will impact key multilateral economic institutions. Through detailed contemporary and historical analyses of the International Monetary Fund, the World Bank, the G20, and the International Trade Organization, Kaya shows that the institutional setting mediates the significance of the underlying distribution of economic power across states. The book presents both case studies and key statistics.
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