Post Crisis Policy: Some Reflections of a Keynesian Economist (original) (raw)

Relevance of Keynesianism in the Post-Recession Period

Economic and Political Weekly

Tracing the rise of Keynesian policies in the post-second world war years to its decline in the 1970s and 1980s with monetary policy playing a central role in macroeconomic stabilization, this article examines its resurrection in the years following the global financial and economic crisis of 2007-08. It points out that at the heart of the present stimulus-austerity debate is the effectiveness of Keynesian stimulus policies during episodes of growth falling below potential, and classifies growth crises into three different types for analytical clarity. Analysis shows that though the growth crisis in advanced economies has spilled over into developing ones through trade and investment channels, its nature is different. The focus in these countries should therefore be on addressing supply shocks and structural reforms, including investment in infrastructure, through a change in the fiscal mix.

Economic policy and the financial and economic crisis

2011

The aim of this paper is to present and evaluate the theory and principles of economic policy applied before the 2008-2009 crisis1. Against this backdrop we will attempt to describe the evolution of targets and tools of economic policy in view of the experiences of recent years ...

The Global Economic Crisis through the prism of the Great Depression

Management: Journal for Theory and Practice Management, 2014

This paper presents the main aspects of the 2008 global economic crisis through the prism of the Great Depression of the 1930s. The aim of this paper is to illustrate the importance of the lessons learned in the Great Depression in overcoming the modern global economy disorders by analyzing the causes of the crisis and the response from the US economic policy. The methods employed in the paper are the following: the method of analysis, the comparative method and the method of deduction. An analytical review of the US anti-crisis economic policy based on relevant statistical data has been presented. The survey results clearly indicate that the crisis has led to a sudden reaffirmation of Keynesian economic policies. The monetary policy was extremely expansionary. The Fed cut its key interest rates to a record low and through open market operations significantly expanded its assets. Confidence in the banking system was preserved and the risk of deflation avoided. The fiscal policy was ...

Keynes and economic crisis: some reconsiderations

Money" from the point of view of the main causes of the economic crisis in general and particularly the present world economic crisis. We compare Keynes's approach to the crisis with the work of contemporary distinguished economists. We conclude that a drop of marginal effi ciency of capital is the main cause of the economic crisis and depression, and that such a drop is an unavoidable consequence of functioning of a market capitalist economy. Such a view differs signifi cantly from the deliberations of many economists who hold insuffi cient demand as the main cause of the crisis. We think that insuffi cient demand appears on the surface as a cause of the crisis. However, insuffi cient demand is just a consequence of a previously overheated economy faced with the drop of MEC. Consequently, a crisis cannot be prevented by expansive fi nancial policy. Therefore it should come as a surprise that Keynes in the last year of his life retreated from his ideas expressed in "General Theory" and declared himself as not Keynesian any more .We think that major systemic, institutional as well as structural changes need to be taken in majority of developed economies in order to cope effi ciently with present and future crisis.

The Great Depression(s) of 1929-1933 and 2007-2009? Parallels, Differences and Policy Lessons

MTA-ELTE Crises History Research Group, Hungarian Academy of Sciences, Working Papers in Crisis History No. 2

This paper provides a comparative analysis of the Great Depression (1929-1933) and the Great Financial Crisis (2007-2009) by contrasting the crises' main driving forces and how they relate to each other with respect to the United States. To this end, causes, consequences and measures undertaken during the crises are evaluated and dissected. The analysis reveals striking parallels between the Great Depression and the Great Financial Crisis. Causal factors in both crises were a flawed design of the banking system (unit banking, too-big-to-fail), a real estate boom and high debt burdens of both households and financial institutions, as well as pronounced economic inequality. Measures taken during each of the crises differed markedly, however. Whereas the political approach to the Great Depression was long characterised by inaction, the response during the recent crisis proved to be swift and aggressive, which prevented a repeat of the Great Depression by attenuating the immediate adverse effects on the economy. However, strong evidence exists that the response may only have deferred the adjustment process initiated by the crisis of 2007-2009. This paper presents empirical observations supporting the view that the structural problems which led to 2007-2009 are still existent today and continue to threaten financial stability.

Ten Years After the Global Economic Crisis : A Retrospective Analysis

2019

The study attempts to take stock of the crisis management measures taken during the global economic crisis between 2008 and 2011, draw macroeconomic conclusions from it and identify the uncertainties and the old-yet-new risks still persisting at the end of 2018. The most important conclusion is that while both economic conditions and financial systems were able to stabilize in the most developed countries of the world economy, it cannot be claimed with full certainty that all risks that had previously led to a recession were able to be handled properly. While quantitative easing (QE) and discretionary fiscal policies in both the USA and the EU restored normalcy in the business cycle, neither productive investments nor labor or total factory productivity were able to return to the growth trends experienced before the crisis