Post-crisis World Research Articles

Германия и Европейский союз после эпохи канцлера А. Меркель

The article is devoted to the analysis of the political legacy of German Chancellor Angela Merkel and in what way the new German government might possibly use it dealing with the transformation of the country and modernization of the European Union. The new political coalition with possible participation of the Green Party will preserve the continuity of the German foreign policy course for strengthening the European Union, deepening the transatlantic partnership, for active cooperation between Berlin and Paris, as well as for inclusion of Belarus, Moldova and Ukraine into the Euro-Atlantic area. The European sovereignty is the main focal point in Berlin. The Conference on the Future of Europe examines it, as well as other evolution issues. The updated legal framework of the EU, feasible strengthening of the European Parliament positions could help transform the European Union into a weighty actor in the polycentric world. Only powerful, relatively sovereign EU is able to secure the “European way of life”. Judgments about the disintegration of the European Union are far from reality. The EU margin of safety and resistance are quite impressive, primarily due to the economic potential of Germany. However, it is really difficult to predict how the European Union will get out of the crisis caused by Covid 19. American concessions to the Germans on the Nord Stream 2 project mean Biden’s serious attitude towards Merkel and Germany – the leader in the EU and one of the important NATO allies. The conditions for Russia’s return to the “European club”, for example, through the revival of M. Gorbachev’s new political thinking in Moscow, indicate rather an illusory desire. There is another, more pragmatic approach. The single European cultural and historical matrix of Greater Europe, communication between the leaders of the Russian Federation, Germany, France and the USA, the economic foundation of contacts, as well as mutual sympathies between Russians, Germans, Europeans give reason to hope for a turn for the better. The chances of a unification agenda remain. Perhaps, it will be used by future generations of politicians, experts of the Russian Federation and the Federal Republic of Germany without preconditions, on the basis of reasonable compromises. Acknowledgements. The article was prepared within the project “Post-Crisis World Order: Challenges and Technologies, Competition and Cooperation” supported by the grant from Ministry of Science and Higher Education of the Russian Federation program for research projects in priority areas of scientific and technological development (Agreement 075-15-2020-783).

Фактор евроПРО в отношениях России с США/НАТО

The article analyses the issue of the NATO missile defense development and the evolution of views in the Russian political, military and expert circles. In 2009, the U. S. President Baraсk Obama declared a start of the NATO missile defense system construction with a goal to be able to intercept a limited nuclear strike from Iran. Russia is in doubt about the stated purpose of the European missile defense and considers it to be a threat to its own strategic nuclear forces. The European missile defense construction has been experiencing technical obstacles and political difficulties: the cancellation of deployment of interceptor SM‑3 IIB and delays in establishing operational capability of the Aegis Ashore land-based missile defense system in Poland. The current architecture of the NATO missile defense, which allows only to intercept a limited number of incoming warheads, has no significant impact on Russian retaliatory strike capability. Nevertheless, the missile defense in Europe remains an irritating factor in relations between Russia and the USA. Apparently, Biden’s arrival in the White House creates an opportunity for parties to address the issue during negotiations on the New START follow-on Treaty. The research addresses the history of Russia–USA–NATO cooperation on theatre missile defense and the reasons for the failure of the joint missile defense in Europe. The author justifies the reanimation of the Joint Data Exchange Center project and outlines the idea of its transformation to the Multilateral Data Exchange Center. Acknowledgments. The article was prepared within the project “Post-crisis world order: challenges and technologies, competition and cooperation” supported by the grant from Ministry of Science and Higher Education of the Russian Federation program for research projects in priority areas of scientific and technological development (Agreement № 075-15-2020-783).

Роль новых цифровых технологий в период кризиса

Received 26.01.2021. The article investigates the role of new digital technologies during a crisis period on the example of the ongoing COVID-19 pandemic. Considering the methods used by different states to prevent the spread of the virus and its consequences, the author analyzes the advantages of the impelled rapid digitalization, scrutinizes its negative aspects, and discusses perspectives. Although the digital transformation had already been taking place before the pandemic actually started (2019), the current crisis facilitates the unprecedented digitalization breakthrough in all life spheres, which will have delayed consequences. The short-run effects are already obvious: deepening of virtual communication; advancement of electronic document flow systems and online-services (including E-Government, public health service, etc.); virtualization of education, culture, sports, leisure activities; transformation of labour market towards distance employment, an outburst of electronic commerce and services, robot automation in economy; virtualization of political life (online-meetings, online-debates, online-summits, etc.), and, moreover, a transfer of power struggle and geopolitical struggle itself to digital platforms. Greater convenience and effectiveness are the most vivid advantages of digital technologies development, which plays the key role in crisis periods. Better access of disabled persons and people living in geographically remote places to medical aid, education, cultural objects, etc. also belongs to important achievements of the rapid digitalization. At the same time, there are significant negative aspects of this process, both general and specific. The violation of democratic rights and freedoms (primarily, of personal data security and individual privacy) is unavoidable in the light of the necessary “digital control” from the state to contain the spread of infection. Private IT companies participating in the process of the virus spread control due to their products (mobile applications, Internet platforms, etc.) also benefit from access to personal data. Whereas this issue is not central in authoritarian regimes like China, it becomes very challenging for democratic societies of the West. The digitalization of services gives wide room for irregularities and fraud in general. A growing “digital exclusion” is another concern: the greater dependency on technical means excludes certain parts of the population unable to use them for different reasons. An increasing individualization and solitude amid the lacking real-life communication gives rise to complicated psychological issues and mental disorders. Among specific negative side-effects of digitalization there are obstacles in personal electronic verification, worsening in the quality of remote medical assistance and online-education, unemployment growth and smashup of offline-businesses in economy, and some other. The most complicated question of the current crisis and the next “post-COVID” period is how serious the above-mentioned negative consequences of the rapid digitalization will be, to what extent they may devaluate its advantages, what sacrifice will be made by humanity to pay for comfort and effectiveness. Acknowledgements. The article was prepared within the project “Post-Crisis World Order: Challenges and Technologies, Competition and Cooperation” supported by the grant from Ministry of Science and Higher Education of the Russian Federation program for research projects in priority areas of scientific and technological development (Agreement № 075-15-2020-783).

Белый рабочий класс США как основа электората Трампа

In 2020, the white working class made almost half of all the votes for Donald Trump – about 37 million out of 73.5 million votes that he got. 67% of white Americans with less than four years degree cast their votes for Trump. 100 days after he lost the reelection, 29% of Republicans believed that Trump will come back to the White House before the month of August 2021. Who are they, these Trumps supporters and believers? How did Trump change their role in political life, and what will be their future after him? During the last 45 years, the white working class of America has transformed from the world’s most affluent and secure working class, the linchpin of the New Deal coalition, the protagonist of the American dream into one of the most vulnerable, disintegrated and declining in its number and power element of the American electorate. Trump used their anger and despair in his way to power, bringing them back to politics. Today both the Democratic and Republican Parties are fighting again for the white working class. Historically, this group was the base of the Democratic Party. But for the last two decades, the Party has become much more liberal in its values and focused more on different groups of minorities. These trends made whites without college degree to shift to the Republican Party, regardless its “party of white riches” image. The current shift occurred in the years of Obama presidency – for highly conservative, less educated, mostly South whites this President came as a challenge to their traditional views of America. By the end of the Obama era, the Republican Party almost filled the gap with the Democratic Party in white working class support. Trump became the high pick of this shift. Meanwhile, the Democrats got the trend and came back fighting for its past electorate who suddenly became the focus of a political game and interparty transformations, which makes it highly possible to change the face of the American party system as we know today. Acknowledgements. The article was prepared within the project “Post-Crisis World Order: Challenges and Technologies, Competition and Cooperation” supported by the grant from Ministry of Science and Higher Education of the Russian Federation program for research projects in priority areas of scientific and technological development (Agreement № 075-15-2020-783).

Центральная Европа в период пандемии: первые последствия для экономики

The article analyzes the response of the Visegrad Group countries to the 2020 pandemic. Measures are outlined that were taken by Hungary, Poland, Slovakia and the Czech Republic to support their economies, including efforts to stabilize labour markets and measures for several most affected sectors. The author assesses the main economic indicators of the Visegrad countries during the first half of 2020 in the light of the consequences of imposed restrictive measures. The reaction of the Visegrad economies to the pandemic correlates with the pan-European reaction. Special attention is paid to the condition of the foreign trade sector of the “four” members, which plays an important role in their economies. The dynamic of foreign trade relations of Hungary, Poland, Slovakia and the Czech Republic with the European Union and Russia during the pandemic is analyzed. Mutual trade flows within the Visegrad Group are evaluated in the light of opportunities to compensate downturns in other markets. Possible prospects for the development of the Visegrad Group after the pandemic are considered. The existing forecasts of the Group’s countries development are analyzed. The factors influencing the recovery process in the Visegrad countries are given. The consequences of COVID 19 will affect many sectors of Hungary, Poland, Slovakia and the Czech Republic, which will not be able to cope with them without the EU support. Realization of opportunities including the emergence of more innovative elements in their economies that meet the challenges of the 21st century, will also depend on the members of the Visegrad Group themselves. Acknowledgements. The article was prepared within the project “Post-crisis world order: challenges and technologies, competition and cooperation” supported by the grant from Ministry of Science and Higher Education of the Russian Federation program for research projects in priority areas of scientific and technological development (Agreement № 075-15-2020-783).

“Зеленоеˮ финансирование в странах БРИКС

The article reviews the “green” financing policy in the BRICS countries. The analysis revealed that all of them have integrated “green” finance in their national strategies. Central banks and other financial regulators, ministries of ecology and finance, and especially development financial institutions (DFI) of these countries take an active part in establishing legislative framework for “green” finance and creating “green” infrastructure, though with different level of success. Analysis of the regulatory documents and statistical data proves the leading position of China. Thanks to its strict and, at the same time, stimulating regulation and supervision China has achieved the impressive results in increasing the volume of “green” loans as well as “green” bonds. China national “green” taxonomy (1st edition in 2015) has evaluated significantly during the last years, moving closer to the international standards. Other countries also make strong efforts in “greening” their financial systems. Brazil and India “green” bonds cumulative issues, estimated by the authors, reached in 2020 about 10 billion dollars each. The largest part of these resources is directed to renewable energy projects, and in case of Brazil also to lower deforestation. In recent years Russia did a lot to establish the legislative framework and to adopt the national taxonomy for “green” financing. But, as it is argued in the article, implementation lags behind policies and regulation. At the same time, the regulation itself still needs to be improved. According to available data on cumulative issues of “green” bonds, Russia takes the 4th place after China, Brazil and India. To make more progress the country needs to continue unified efforts of all participants of the Russian “green” finance market, including civil society. At the last BRICS summit all countries confirmed the promotion of the consolidated position on the “green” and responsible financing, with sharing best practice and developing mutually beneficial cooperation that can be helpful for all members to achieve national environmental objectives. Acknowledgements. The article was prepared within the project “Post-crisis world order: challenges and technologies, competition and cooperation” supported by the grant from Ministry of Science and Higher Education of the Russian Federation program for research projects in priority areas of scientific and technological development (Agreement № 075-15-2020-783).

Космический рывок США: его последствия для России и мира

The article is dedicated to the United States’ achievements in space rivalry, its economic, geopolitical, scientific and technological aspects. Given the fact that the U.S. are faced with a difficult period in their history, they will try to restore the positive image of American democracy not only through traditional political methods, but also via scientific and technological leadership, including in the field of outer space exploration. The author focuses on NASA’s modern space programs, among which are initiatives that deal with landing on asteroids, exploring deep space, the Moon and Mars as well as attempts to commercialize outer space through space tourism. The author also compares the space program budgets of the U.S., Russia, China and some European countries. The article presents all these aspects in the current context, with paying attention to the STEM education (Science, Technology, Engineering, Mathematics). The goal is to understand why America still leads in space exploration and sets the bar. In conclusion, the author argues that Washington will keep prioritizing space industry and involve private companies in this field through allocating additional funding and granting tenders to those who are most competitive. In addition, achievements in the U.S. space program is a matter of international prestige and American leadership, given the fact that the image of the country has suffered a lot, especially amidst Trump’s bygone, yet controversial presidency. A successful implementation of Washington’s ambitions in outer space will strengthen both its leadership and its ties with Europe, which is strategically important for America in the times of political confrontation with Russia and China. In the article, the author primarily relies on descriptive and narrative scientific approaches, comparative and historical methods as well as systematic approach by analyzing NASA documents and publications, speeches of the U.S. presidents and specialized media outlets. The novelty of the article adds up to the fundamental analysis of the American space program through the lens of history and current times while focusing on its political, economic and technological aspects. Acknowledgements. The article was prepared within the project “Post-crisis world order: challenges and technologies, competition and cooperation” supported by the grant from Ministry of Science and Higher Education of the Russian Federation program for research projects in priority areas of scientific and technological development (Agreement № 075-15-2020-783).

США–КНР: механизмы и динамика гонки вооружений

Received 23.12.2020. The U.S.–China confrontation, generating a military technology race, has been gradually developed over a long period of time after the end of the Cold War. The mission of countering U.S. forces in a possible armed conflict in the Southeast Asian region has led China to adopt a “counter-intervention strategy”, better known by the designation “anti-access/area denial” (A2/AD). The U.S. responded by development of sea-based missile defense systems, which has dangerously damaged the military balance. The study shows that both countries independently faced the need to accelerate one of the most destabilizing types of modern weapons – hypersonic weapons – during this race that required specific military-technical solutions. The course of this arms race has led the U.S. to development of the “AirSea Battle” concept and then other more radical operational concepts, such as “distributed lethality”, requiring a complete step-by-step restructuring of the Navy. A study of the behavior of both powers shows that, at the present stage, the “arms race” is increasingly becoming a more complex process of “technological race”, in which it is at times difficult to distinguish the components of the dynamics of the civilian and military sectors of the economy and of advanced researches and developments. The U.S. adoption of the ambitious “Third Offset Strategy” program occurred simultaneously with the deployment of Chinese research in similar directions, including the improvement of command, control and communications systems, development of lethal autonomous weapons systems and military applications of artificial intelligence. One of the main questions in this regard is to what extent the U.S. dispersed model of innovation management can compete with the Chinese centralized model of “military-civil fusion” marked by its high ability to concentrate resources and at the same time – linkages with global markets through the national champion companies. Acknowledgments. The article was prepared within the project “Post-crisis world order: challenges and technologies, competition and cooperation” supported by the grant from Ministry of Science and Higher Education of the Russian Federation program for research projects in priority areas of scientific and technological development (Agreement № 075-15-2020-783).

In the post-crisis world, did debt and equity markets respond differently to high-tech industries and innovative firms?

The belief that more general capital constraints are exacerbated and magnified in innovative and technology-based firms has provided justification for policy intervention, across the range of equity and debt-based financial instruments. In this article, we tackle the question as to whether smaller innovative firms, both in and outside of high-tech industry sectors, do indeed face greater constraints when seeking to access capital from external markets. Our results show that both high-tech and innovation are important determinants of the firms’ demand for external finance, but these effects are more pronounced in equity markets than debt markets. On the supply side of capital markets, being in a high-tech industry sector was relatively unimportant from the point of view of financiers. Rather, being involved in innovative activity was associated with a greater incidence of absolute and partial rationing and also in terms of the general process of applying for finance being substantially more difficult. These findings were more acute for firms in high-tech industry sectors that were also engaged in innovative activity. Our findings also suggest that policy makers need greater clarity and nuance when developing policy responses around high-tech and broader innovation activity which, although they have significant overlap, should not be conflated.

Aggregation of Public Choice: Partnership of the State and Business in Structuring Post-Coronavirus Reality

The COVID-19 pandemic has seriously damaged national socio-economic systems, causing the deepest economic recession since the Great Depression. Social reality has been divided into the period before and after COVID-19. Neither nation-states, nor national health systems, nor economic-centrist national communities, nor national models of public choice aggregation have managed stand the test of the coronavirus pandemic. Post-coronavirus reality will begin to form after the completion of the COVID-19 pandemic and will be based on completely different principles of functioning. That is why even today theorists and practitioners are thinking about the future of the post-crisis world, the hallmark of which is absolute uncertainty. The methodological approaches developed by the new political economy make it possible to rethink the phenomenon of partnership between the state and private business as a mechanism to assess the effectiveness of alternative options for the institutional structure of the new reality, the functions of the state in society with universal values in its basis, in models of aggregation of public choice, etc., taking into account the realities of the post-coronavirus world.

Utopia and the Anthropocene

Utopia and the Anthropocene

Wereldrecht, Weltrecht en droit mondial

Summary In times of past crises, the term world law served both as rhetorical tool (to give people hope), and as key term in academic and political blueprints for a post-crisis world order. This article describes how world law was used in Dutch (wereldrecht), German (Weltrecht) and French (droit mondial) popular, political and academic debates. What did those terms mean in the past? And what is their actual and potential relevance in contemporary discussions? How can world law promote global solidarity in the present time? The article ends with some general reflections on the potential value of the world law tradition(s) in today’s debate on how to shape the international legal order in the (post)corona era.

BRICS Countries in Global Value Chains

The picture of the post-crisis world is shaped by the paradigm shifts about the sustainability of national development as a globally integrated co-development and as a necessary condition for national security and defence. Each state faces the steep task of developing new effective foreign economic policy, replacing the former export-oriented and protectionist import-substituting strategies. Such policy changes primarily concern the BRICS countries, including Russia and its place/role in expanding international trade in intermediate goods and services. Simultaneously, Russia and the BRICS must develop new mechanisms of economic cooperation between themselves in the form of global value chains (GVCs).

Pokryzysowa zmiana

Bankruptcy of Lehman Brothers, the 4th largest investment bank in the USA and the collapse of a financial sector initiated the biggest economic crisis since the Great Depression. Global recession sparked off an ongoing public debate. The main concern is whether it is an ordinary slubp or a serious systemic crisis. This article highlights two crucial changes appering on the horizon of the post-crisis world: the death of a neo-liberal doctrine and „rising tide” of women.

Monetary Constitutionalism: Some Recent Developments

The volume edited by Leland Yeager more than 50 years ago and published in 1962 under the title In Search of a Monetary Constitution has turned out to be remarkably prescient since the Great Inflation was then about to begin. One might expect that in the wake of the Global Financial Crisis and Great Recession interest in monetary-constitutional matters would be revived and this has indeed been the case. In this paper an attempt is made to assess whether and to what extent scientific progress has been made in defining the nature and characteristics of a monetary constitution for the post-Crisis world. To that end some recent contributions to the literature are reviewed critically.
 Keywords: Constitutionalism, Constitutional Political Economy, Monetary Con-stitution, Monetary Systems.
 JEL Classification: B53, E02, E50, H40, P16.
 Resumen: El volumen editado por Leland Yeager hace más de 50 años y pub-licado en 1962 con el título In Search of a Monetary Constitution, ha resultado ser notablemente premonitorio, ya que por aquella época iba a comenzar la Gran Inflación. Podría esperarse que, a raíz de la crisis financiera global y la Gran recesión, hubiese aumentado el interés por las cuestiones monetari-as-constitucionales y, efectivamente, este ha sido el caso. En este trabajo se intenta evaluar si, y hasta qué punto, se ha logrado un progreso científico en la definición de la naturaleza y las características de una constitución mone-taria para el mundo posterior a la crisis. Para ello se revisan críticamente algu-nas contribuciones recientes de la literatura.
 Palabras clave: Constitucionalismo, Economía Política Constitucional, Con-stitución Monetaria, Sistemas Monetarios.
 Clasificación JEL: B53, E02, E50, H40, P16.

At the final stage of the global crisis: Economic tasksin 2017-2019

The paper deals with the global and national trends of economic and social development at the final stage of the global structural crisis. Special attention is paid to intellectual challenges economists will face with in the post-crisis world: prospects of growth without inflation, new global currencies and the role of cryptocurrencies, central banks independence and their role in economic growth stimulation, new tasks and patterns of government regulation, inequality and growth. Special features of Russian post-crisis development are also under consideration. Among them: prospects of macroeconomic support of growth, inflation targeting, new fiscal rule, social dynamics and new challenges to welfare state. The paper concludes that the main obstacles for economic growth in Russia are concentrated in the non-economic area.

Meeting the world’s demand for safe assets? Macroeconomic policy and the international status of the euro after the crisis

In this article, I engage with the chartalist literature to explore the political foundations of international currencies. Drawing on this literature as well as on recent scholarship on the shortage of safe assets in the world economy, I challenge a prevailing premise of the International Political Economy literature that international currency status needs to be based on conservative macroeconomic policy institutions and practices, which is deemed necessary to maintain foreign confidence in the stability of the real value of the international currency. I contend that international currency status in the post-crisis world economy hinges on the willingness and capacity of the currency provider to adopt accommodating monetary and fiscal policies. First, the central bank needs to offer a backstop to the market for sovereign debt securities by acting as a lender of last resort to the government, whereas fiscal policy expansion is necessary to sufficiently expand the stock of the only securities that can assume the function of genuinely safe assets: sovereign debt. Second, expansionary monetary and fiscal policies enable the international currency issuer to supply safe assets to the rest of the world by running deficits on its trade balance. This article analyses how the European Central Bank’s monetary policy decisions in the wake of the crisis ran against these two prerequisites, constraining the Eurozone to become a large net provider of safe assets in the world economy. By linking these decisions to the creditor and export interests of the Northern Eurozone countries, it disputes the European Central Bank’s ‘neutral stance’ regarding the internationalization of the euro.

Guest Editors’ Introduction: Monetary rules for a post-crisis world

Guest Editors’ Introduction: Monetary rules for a post-crisis world

Conventional and unconventional monetary policy rules

This essay examines the challenges in devising rules for unconventional monetary policy suitable for a post-crisis world. It is argued that unconventional monetary policy instruments are a poor substitute for conventional interest-rate policy in stabilizing the economy and in insulating monetary policy from political pressures. Some suggestions for the reform of inflation targeting are made to reduce the need for unconventional policy instruments in the future.

The Yellen rules

Suppose that the Fed were to adopt a policy rule. Which rule should it adopt? We propose three criteria. First, the rule should be consistent with good economic performance over a long historical period. Second, the rule should be consistent with recent Fed policy following the Great Recession. Third, the rule should be consistent with projected Fed policy. The first criterion is normative, while the second and third criteria are pragmatic. We consider three rules that have been the focus of extensive policy discussion. The Taylor (1993) and Yellen (2015) rules are “balanced” in the sense that the coefficients on the inflation and output gaps are equal, while the Yellen (2012) rule is an example of an “output gap tilting” rule because the coefficient on the output gap is larger than the coefficient on the inflation gap. We also consider “inflation gap tilting” rules where the coefficient on the inflation gap is larger than the coefficient on the output gap. An inflation gap tilting version of the Yellen (2015a) rule with a time-varying equilibrium real interest rate provides the most consistency with the three criteria.This paper was prepared for “Monetary Rules for a Post-Crisis World,” Mercatus-CMFA Academic Conference, September 7, 2016. We thank the participants at the conference for helpful comments and discussions.