At the end of the 20th century, mainstream economics was based on theories which viewed capitalism as a self-regulating system, whereby crises come about due to external shocks and would be automatically corrected by the price mechanism if it was flexible enough. Post-Keynesian economists, however, consider that the business cycle and the crises are endogenously generated. They recommend active policies as a response, though the remedies may be worse than the illness if they are not applied at the right moment and in the right proportions.
The first great recession of the 21st century offers post-Keynesian economists an opportunity to prove the realism of their models. It is also a chance to make theoretical improvements, to abandon some hypotheses and to introduce new ones.
This book, from a top group of international economists, analyzes the causes, consequences and evolution of the crisis from a variety of post-Keynesian perspectives. It then presents a case for realistic and essential remedies. The book is both theoretical and applied, with a global reach and a particular focus on the European debt crisis.
Table of Contents
Introduction Óscar Dejuán, Eladio Febrero and Jorge Ux Part I. The financial side: the burden of debt and the loss of confidence 1. Finance-dominated capitalism, re-distribution and the financial and economic crises - a European perspective Eckhard Hein 2. The world in balance sheet recession: causes, cures and politics Richard C. Koo 3. The failure of the new macroeconomic consensus: from non-ergodicity to the efficient markets hypothesis and back again Nigel F.B. Allington, John S.L. McCombie and Maureen Pike 4. The debt trap Óscar Dejuán II. The balance of payments constraint. Trade deficits as a source of risky debt 5. Controversial and novel features of the Eurozone crisis as a balance of payment crisis Sergio Cesaratto 6. Unhappy families are all alike: Minskyan cycles, Kaldorian growth, and the Eurozone peripheral crises Alberto Bagnai 7. The adjustment of current account imbalances within the European Monetary Union since the beginning of the Great Recession: some strengths and many weaknesses Jesús Paúl and Jorge Uxó 8. The effects of the great recession of 2008 on the neo-Keynesian development experiences: the cases of Argentina and Brazil Fabián Amico and Alejandro Fiorito III. The real side of the economy: the problem of effective demand and the failure of austerity policies 9. Net private savings in relation to the government’s financial balance: some basic principles of macroeconomics disregarded by the European Union’s economic policy makers Kazimierz Laski and Leon Podkaminer 10. Business Investment, Growth and Crisis Ana-Rosa González, Philip Arestis and Óscar Dejuán 11. Does the Effectiveness of Fiscal Stimulus Depend on Economic Context? Steven Fazzari 12. Spain during the Great Recession. Teetering on the brink of collapse Eladio Febrero and Fernando Bermejo
Óscar Dejuán is Professor of Economics and Head of the Department of Economics and Finance at University of Castilla-La Mancha, Spain
Eladio Febrero is a lecturer at University of Castilla-La Mancha, Spain
Jorge Uxó is a lecturer at University of Castilla-La Mancha, Spain