Post-Keynesian Views of the Crisis and its Remedies

Edited by Óscar Dejuán, Eladio Febrero Paños, Jorge Uxo Gonzalez

© 2013 – Routledge

308 pages

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Paperback: 9781138902060
pub: 2015-03-04
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Hardback: 9780415822763
pub: 2013-04-25
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About the Book

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

About the Editors

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

About the Series

Routledge Critical Studies in Finance and Stability

The 2007-8 Banking Crash has induced a major and wide-ranging discussion on the subject of financial (in)stability and a need to revaluate theory and policy. The response of policy-makers to the crisis has been to refocus fiscal and monetary policy on financial stabilisation and reconstruction. However, this has been done with only vague ideas of bank recapitalisation and ‘Keynesian’ reflation aroused by the exigencies of the crisis, rather than the application of any systematic theory or theories of financial instability.

Routledge Critical Studies in Finance and Stability, edited by Jan Toporowski from SOAS, University of London covers a range of issues in the area of finance including instability, systemic failure, financial macroeconomics in the vein of Hyman P. Minsky, Ben Bernanke and Mark Gertler, central bank operations, financial regulation, developing countries and financial crises, new portfolio theory and New International Monetary and Financial Architecture.

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Subject Categories

BISAC Subject Codes/Headings:
BUS000000
BUSINESS & ECONOMICS / General
BUS004000
BUSINESS & ECONOMICS / Banks & Banking
BUS023000
BUSINESS & ECONOMICS / Economic History
BUS039000
BUSINESS & ECONOMICS / Economics / Macroeconomics