Diversity, Globalisation and Market Stability

Laurence Lasselle, Serge Svizzero () and Clement Tisdell
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Serge Svizzero: CERESUR - Centre d'Etudes et de Recherches Economique et Sociales de l'Université de La Réunion - UR - Université de La Réunion

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Abstract: Globalisation has become extremely intense since the earlier seventies. Given that the world economy is getting dose to a single market, a more efficient outcome via globalisation can be expected. However, globalisation may also have negative effects. We illustrate our findings through a simple cobweb model where we analyse different shape and slope of the aggregate supply curve. We show that when globalisation is too intensive, it leads to more instability on markets because of a reduction of behavioural diversity. The economic literature indicates that this diversity can be necessary for market stability as well as for macro-economic stability. We demonstrate that as a result of globalisation, the goals or motivations of economic agents may become more uniform (more profit-oriented) and generate market instability.

Keywords: Diversity; Globalisation; Heterogeneity of Behaviour; Instability (search for similar items in EconPapers)
Date: 2001-02
Note: View the original document on HAL open archive server: https://hal.univ-reunion.fr/hal-02168764
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Journal Article: Diversity, Globalisation and Market Stability (2001)
Working Paper: Diversity, Globalisation and Market Stability (2001)
Working Paper: Diversity, Globalisation and Market Stability (2001)
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