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The main aim of the World Economy and Finance Research Programme is to advance knowledge of the inter-relationships between financial markets and economic growth and stability. Twenty six research groups in top universities throughout the United Kingdom are carrying out this work. The Programme is fully funded by the independent Economics and Social Research Council (ESRC) and runs until 31 January 2010.

Forthcoming Events

15-16 December 2008

Conference - Information Externalities, Social Learning and Financial Markets,
University of Cambridge
Details here

19 January 2009

Workshop - Regulatory Response to the Financial Crisis,
London School of Economics.
Details are here

13-14 February 2009

Conference - International Macroeconomics and Finance,
organized by the Centre for Economic Policy Research, ECARES (Universite Libre de Bruxelles), Catholic University of Leuven, the National Bank of Belgium, and the ESRC World Economy and Finance Research Programme
Brussels
More information here

6-15 March 2009

ESRC Festival of Social Science.
During the Festival, the World Economy and Finance Research Programme will organise a Public Discussion Meeting in Glasgow on
The 2008 Crash and the Future of the Global Economy
Details will be made available as soon as possible on the WEFRP website

30-31 March 2009

University of Glasgow
Conference - The Future of Financial Regulation
This conference will bring together academics, market practitioners, and policy makers
Details here

  

World Economy andFinance newsletter

"This is the sixth e-newsletter from the Economic and Social Research Council's World Economy and Finance Research Programme. It sketches some key developments and results. I hope you find it useful and informative.

More information about the Programme - on all the projects, publications, discussion papers, conferences, and other events - can be found on our website.

If you have received this newsletter in error or do not wish to receive further issues, then please reply to the email with the word `unsubscribe` in the subject heading."

Prof John Driffill, Programme Director

Discussion Forum

We`ve added a discussion forum to the WEFRP web site. You can reach it directly or via the home page of the site by clicking on the `Crisis and Recession` tab on the left-hand side. It allows WEFRP researchers to present short, easy-to-read summaries of their work, thoughts on the current crisis, and any other topics, to the internet readership, and lets readers post comments. You are encouraged to take a look and comment on any of the material there. You are also very welcome to submit any short articles of your own to be posted on the site and contribute to the debate. Any feedback on the discussion forum will be very welcome.

On the forum at present:

Panicos Demetriades argues that public ownership of the banking system may be no easy solution. Evidence shows that there have been many problems in the past.

Stephany Griffith-Jones makes the case for urgent reform of financial market regulation, based on the principles that it should be counter-cyclical and comprehensive.

Catherine Schenk explains why international co-ordination of regulation of financial markets has not worked in the past and is not likely to do so now.

Patrick Minford summarises his analysis of monetary policy in the credit crunch based on a new model for the macro-economy of the European Union.

Jon Danielsson dissects the collapse of the Icelandic banking system and draws lessons for other small `over-banked` economies

Andreas Park and colleagues analyse herd behaviour in financial markets. Sometimes it results from individually rational responses to disparate signals.

Project Profile

Legal and Economic Aspects of Sovereign Debt Default: The Argentina Case

Once a country defaults on sovereign debt, what options are open to its creditors to recover their capital? Punishment by seizing assets is ruled out unless sanctioned by a court that has international acceptability. But typically both debtor and creditors would be interested in renegotiating the terms of repayment. These negotiations between debtor and creditors after the default can be analysed as a bargaining game. Bargaining theory sheds light on the role of the key variables that determine the outcome of such negotiations. The goal of the project is to explain the outcome of negotiations between debtor and creditors with a special focus on: the multiplicity and the heterogeneity of creditors; the role of third parties like the IMF and the courts; and the role of collective action clauses and other legal particulars.

Sovereign debt problems in emerging markets have been pushed onto the back burner recently by the global financial meltdown and recession, but may come back with a vengeance. The guarantees that governments (in the UK, US, and Euro Zone) have given to financial institutions may have converted a problem of private insolvency into public insolvency, as one very small country, Iceland, recently found.

A conference on `Sovereign and Public Debt and Default` at the University of Warwick on 4th and 5th December 2008 presented results from the project along with related work from scholars in the United States and Europe. Full details and papers are available here.

The project is run by Dr Amrita Dhillon at the University of Warwick. Contact details here