DASICON2018 We need to talk about Europe! The European Union's Challenges & Opportunities Ahead.

DASICON2015: Visible Effects of the Invisible Hand

In September 2008, when the Lehman Brothers announced their bankruptcy, shockwaves were felt throughout global financial markets. What was initially a crisis in the U.S subprime-mortgage industry, turned out to have devastating effects on the international economy. Banks worldwide that had bought asset-backed securities which then defaulted on payments, were on the path toward bankruptcy and had to be rescued by their national governments. State debt increased massively as a result, leading to distrust by financial markets and the collapse of national economies. Europe is still struggling to overcome the effects of this event: Greece has a staggering rate of 27% unemployment, while other countries are trying to settle their debts.

According to experts from the World Economic Forum, income inequality is the top threat facing the world in 2015. Figures from Oxfam and Credit Suisse show that 48% of global wealth is owned by 1% of the world population. Alternatively, 80 of the world’s top billionaires own as much as the world bottom 50%. If current trends continue the economic gap is expected to widen.

At the same time, global extreme poverty has fallen: the share of the world population living on less than 1.25 dollars a day has decreased from 52 % in 1981 to 21 % in 2010. Clearly, there are both positive and negative effects of the current economic system.

Questions of development and conditions for economic growth are important topics on the international agenda. Some interpret the establishment of new financial institutions such as the Asian Infrastructure Investment Bank as challenging the international institutions representing (post)-Washington Consensus. The question we now ask ourselves is: what improvements should take place in order for the world economic system to be more stable and facilitate increased economic prosperity for those living in it? What are the consequences of increasing differences in wealth and income? How should policy-makers address such issues? In what circumstances can economic inequality be justified?

At the 11th DASI Conference, we will explore a range of topics, including: aid & trade, economic inequality, democracy & development, financial institutions & stability, as well as alternative ways of development. How should we address the diverse effects of the world economic system, or, in the language of Adam Smith, the visible effects of the invisible hand?