The mercantile dilemma: formalisations and historical conclusions

  • Alessandro Saccal PhD Economics and Finance, University of Rome Tor Vergata, Italy MSc Mathematics, Heriot-Watt University, UK

Abstract




The following contributions are hereby worked: one mathematically formalises Mundell’s Impossible trio and Rodrik’s Globalisation paradox, supplying the latter with a taxonomy in terms of the current account; by means of Kaldor’s price endogeneity in output, one proves that external real money market disparity and trade generate external output mismatches and lead to autarky unless offset, using topology and dynamical systems; one characterises transfers and federalism and shows that all unitary states are federal polities and can merge into confederations; one demonstrates that the said external output mismatches can be only eluded via autarky or neutral- isation, irrespective of federalism; one discerns (i) artificial currency areas guaranteeing inter-regional external output growth equality and (ii) modern protectionism as two Nash equilibria, to wit, the mercantile dilemma, especially rationalising the nexus between the Gold standard, the Industrial revolution and the Great divergence therethrough.




References

[1] Aizenman J. (2013) “The impossible trinity - from the policy trilemma to the policy quadrilemma", Global journal of economics.
[2] Bordo M. and James H. (2013) “The European crisis in the context of the history of previous financial crises", Journal of macroeconomics.
[3] Israel J. (1997) “England's mercantilist response to Dutch world trade primacy, 1647-74", Conflicts of empires: Spain, the Low Countries and the struggle for world supremacy (1585-1713), Bloomsbury.
[4] Kaldor N. (1970) “The case for regional policies", Scottish journal of political economy.
[5] Keynes J. M. (1980) “The collected writings", Volume 25: activities, 1940-44: shaping the post-war world: the Clearing union, Cambridge university press.
[6] Krugman P. (1979) “Increasing returns, monopolistic competition, and international trade", Journal of international economics.
[7] Meade J. (1957) “The balance of payments problems of a European free trade area", Economic journal.
[8] Mélitz M. (2003) “The impact of trade on intra-industry reallocations and aggregate industry productivity", Econometrica.
[9] Mundell R. (1963) “Capital mobility and stabilization policy under fixed and flexible exchange rates", Canadian journal of economics.
[10] Nash J. (1950) “Equilibrium points in n-person games", Proceedings of the national academy of sciences.
[11] Padoa-Schioppa T. (1988) “The European monetary system: a long-term view", Cambridge university press.
[12] Palley T. (2017) “The fallacy of the globalization trilemma: reframing the political economy of globalization and implications for democracy", FMM working paper.
[13] Rodrik D. (2011) “The globalization paradox: democracy and the future of the world economy", William Warder Norton and company.
[14] Rey H. (2015) “Dilemma not trilemma: the global financial cycle and monetary policy independence", NBER working paper.
[15] Serra A. (1613) “Breve trattato delle cause che possono far abbondare li regni d'oro e d'argento dove non sono miniere", G. G. Destefanis (1803).
[16] Thirlwall A. (2014) “Kaldor's 1970 regional growth model revisited", Scottish journal of political economy.
[17] Thirlwall A. (2002) “The nature of economic growth", Edward Elgar publishing.
[18] Verdoorn P. J. (1949) “Fattori che regolano lo sviluppo della produttività del lavoro", L'industria.
Published
2022-06-30
How to Cite
SACCAL, Alessandro. The mercantile dilemma: formalisations and historical conclusions. Journal of Mathematical Economics and Finance, [S.l.], v. 8, n. 1, p. 31 - 89, june 2022. ISSN 2458-0813. Available at: <https://journals.aserspublishing.eu/jmef/article/view/7166>. Date accessed: 02 oct. 2022. doi: https://doi.org/10.14505/jmef.v8.1(14).03.