Paolo Savona

Paolo SavonaPaolo Savona is Emeritus Professor of Economic Policy at LUISS Guido Carli University, Rome. He is former Ministry of Industry of the Italian Republic. He worked at the Bank of Italy and chaired several public as well as private bodies. He is Vice Chairman of the Aspen Institute Italia. In 2015 he was Jemolo Fellow at Nuffield College, Oxford. He published extensively on money and finance. His latest book is Dalla fine del laissez-faire alla fine della liberal democrazia (From the end of laissez-faire to the end of liberal democracy), published by Rubbettino, 2016.

Papers Published in World Economics:

How to Reconcile Democracy, the State and the Global Market

Nation states were the vehicle for market capitalism, but global market capitalism has freed itself from regulations imposed by nation states. A trilemma between democracy, the state and the market became an irreconcilable one, and gathered momentum. The post-War period has shown it is impossible to have a fixed exchange rate, free capital movement and sovereign monetary policy all working at the same time. To reconcile the trilemma, development banks need to cooperate or merge to finance transcontinental infrastructure projects to push up growth and employment and the World Trade Organization (WTO) should include a norm whereby countries joining it adopt the same exchange-rate regime (be it fixed or flexible). Without a deep reform in the global architecture, disequilibria, both economic and social, will continue to worsen, and conflicts will arise – only another ‘great depression’ will shock the international economy to induce the necessary international cooperation and joint action.

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