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A major plank for both recovery of the European economy and for its structural transformation is a significant increase in investment, particularly if linked to innovation. Higher investment can accelerate recovery in the short-term, by contributing to expand aggregate demand, but is as-or more important for increasing the future output and structural transformation. In this paper, we argue that for a significant increase in European Investment to occur, it is necessary to have a two pronged approach. One is to use regional and national development banks and national development banks to help catalyse investment. The other is to reduce the pace of fiscal consolidation, so that public investment does not continue to fall. Using the Cambridge Alphametric Model (CAM) we compare and contrast an austerity scenario, which project current austerity trends in Europe till 2025, with an ‘investment-focused’ scenario where investment rates are increases further in the context of an expansion in lending by both the European Investment Bank (EIB) and national development banks, and at the same time governments pursue more expansionary fiscal policies in order to stimulate investment and economic growth further. Our analysis gives a strong illustration of the positive role that development banks can and do play in helping economic recovery after crisis and in achieving structural transformation.

This article explores a gendered expansionary macroeconomic scenario for Europe as an alternative to the current austerity policies over the medium term. Using a non-equilibrium structuralist macroeconometric model we demonstrate that the dual aim of economic growth and increases in both male and female employment can be achieved via the adoption of gender-sensitive expansionary macroeconomic policies. We compare and contrast three scenarios for Europe: continued austerity, gender-neutral expansionary scenario and gendered expansionary scenario. Projections for our gendered expansionary scenario suggest that an additional 7.4 million jobs for women could by created in the Eurozone and the United Kingdom by reversing austerity policies, by gendering and increasing government expenditure and private investment. Further, higher growth rates under the gendered expansionary scenario lead to significant reductions of debt-to-GDP ratios and lower budget deficits. The main recommendation is for Europe to roll back austerity policies and to embark on a new gender-focused economic trajectory.

This paper contrasts the conventional balance sheet approach to the analysis of economic disturbances in emerging markets with the alternative balance sheet approach that applies and extends Minsky's Financial Instability Hypothesis to (open) emerging market economies. Earlier balance sheet studies are found to be flawed because of a failure to disaggregate firms' balance sheets. Examination of such balance sheets in Thailand, Malaysia, Indonesia, Singapore, and Hong Kong suggests that firms in the three crisis countries did share common causes of financial fragility, but that the level of financial development and the particular domestic economic and political situation also affected their situation.

This vital new Handbook is an authoritative volume presenting key issues in finance that have been widely discussed in the financial markets but have been neglected in textbooks and the usual compilations of conventional academic wisdom.