Will the Global Crisis Lead to Global Transformations? The Global Financial System: Pros and Cons

Journal of Globalization Studies, Vol. 1, No. 1, pp. 70-89, 2010

20 Pages Posted: 17 Jul 2010 Last revised: 27 Feb 2011

See all articles by Leonid Grinin

Leonid Grinin

National Research University Higher School of Economics; Eurasian Center for Big History & System Forecasting; Volgograd Center for Social Research

Andrey Korotayev

Russian State University for the Humanities

Date Written: July 15, 2010

Abstract

This article analyzes the global causes of the contemporary crisis and the possibilities to eliminate the most acute problems that have generated this crisis. It analyzes both the negative role of the world financial flows and their important positive functions including the 'insurance' of social guaranties at the global scale. On the one hand, anarchic and extremely rapid development of new financial centers and financial flows contributed to the outbreak of the global financial-economic crisis. The latter was amplified by the non-transparency of many financial instruments, which led to the actual concealment of risks and their global underestimation. On the other hand, new financial technologies decrease risks in a rather effective way, they expand possibilities to attract and accumulate enormous capitals, actors, and markets. The modern financial sector also contributes to the provision of insurance for social funds at the global scale. The participation of pension and insurance funds in financial operations leads to the globalization of the social sphere. Countries poor in capital, but with large cohorts of young population, are involved more and more in a very important (though not quite apparent) process of supporting the elderly portion of the population in the West through the vigorous unification of the world's financial flows, their standardization, and by increasing global mobility and anonymity.

Keywords: global crisis, global financial system, financial revolution, financial technologies, pension funds, social funds, medium-length economic cycles, Juglar cycles, international order

Suggested Citation

Grinin, Leonid and Korotayev, Andrey, Will the Global Crisis Lead to Global Transformations? The Global Financial System: Pros and Cons (July 15, 2010). Journal of Globalization Studies, Vol. 1, No. 1, pp. 70-89, 2010. Available at SSRN: https://ssrn.com/abstract=1640507

Leonid Grinin (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Eurasian Center for Big History & System Forecasting ( email )

Rozhdestvenka 12
Moscow, 107031
Russia

HOME PAGE: http://www.sociostudies.org/ecbsf/

Volgograd Center for Social Research ( email )

Russia, 400079, Volgograd, Kirova street, 143
Volgograd, 400079
Russia

HOME PAGE: http://www.socionauki.ru/authors/grinin_l/

Andrey Korotayev

Russian State University for the Humanities

6
Miusskaya Square
Moscow, GSP-3, 125993
Russia

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