International Political Economy, Global Financial Orders and the 2008 Financial Crisis

Abstract

The 2008 financial crisis triggered the most severe global economic downturn since the Great Depression. The crisis has provoked soul-searching among economists, yet international political economy (IPE) scholars have been relatively sanguine. We argue that IPE has strayed too far away from studying the geopolitical and systemic causes and consequences of the global economy. IPE must explain the generation and transformation ofglobal financial orders.Both the distribution of political power and the content of economic ideas will shape any emergent global financial order. A Kuhnianlife-cycle frameworkof global financial orders permits a systemic approach to global finance that integrates the study of power and social logics into our understanding of markets.