Stabilising an unequal economy? Public debt, financial regulation, and income distribution
"The macroeconomic stabilisation policies which were put in place in most countries hit by the financial and economic crisis of 2008 - 09 have been successful in preventing a great depression. Economic policy has witnessed a certain "return of Keynesianism" (see, e.g., Dullien et al....
| Institution: | ETUI-European Trade Union Institute |
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| Format: | TEXT |
| Language: | English |
| Published: |
Marburg
2011
Metropolis Verlag |
| Subjects: | |
| Online Access: | https://www.labourline.org/KENTIKA-19136821124919540039-Stabilising-an-unequal-economy.htm |
| Summary: | "The macroeconomic stabilisation policies which were put in place in most countries hit by the financial and economic crisis of 2008 - 09 have been successful in preventing a great depression. Economic policy has witnessed a certain "return of Keynesianism" (see, e.g., Dullien et al. 2010), but it is a strange sort of Keynesianism. Hyman Minsky's (1986 [2008]) famous question of how to "stabilise an unstable economy" in the light of "financial fragility" is still the burning question of our time. Minsky's answer to the question was "big government". Keynes's vision was one of not merely stabilising the economy, but also one of creating a more equal society. However, this is not what Keynesian, anti-cyclical policies are aiming at today.
With the crisis the 'efficient market' consensus in academia and politics has begun to crack. There has been, at least so it appeared for a few months, a new consensus in economic policy that financial markets need to be tightly regulated and that under some conditions discretionary stabilisation policies can be necessary in the face of negative aggregate demand shocks. But if there is to be veritable "return of Keynesianism", it will require more thorough revisions and in particular a rethinking of the role of inequality, which, as many argue, contributed importantly to the global crisis.
In light of these remaining global problems, unequal national economic outlooks, and the return of the austerity policies, the initial success of the stabilisation policies put in place since 2008 - 09 may turn out to be insufficient. This raises the following questions: Are the present policies merely stabilising an unsustainable accumulation regime based on income polarisation and the dominance of financial markets? What are the economic and political implications of rising public debt? How can financial regulation contribute to stability as well as equity? These questions are addressed, among others, in this book." |
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| Physical Description: | 432 p. Paper |