Global crises: Is the Keynesian recipe relevant if applied under a global governance?
AbstractKeynesian policy was quite successful in the post-war decades in Western Europe, but by the late 1960s lost its efficiency due to changes in conditions rather than its mistaken logic. The lesson from the first global crisis erupting in early 1970s and also from the subsequent several crises since then is that the increasing crisis propensity of the world economy is rooted in its inherent disequilibria stemming from deep inequalities, asymmetrical interdependencies and disintegrated socio-economic structures. In view of the failure of the prevailing methods of crisis management, particularly those undifferentiated, antisocial austerity measures corresponding to a neo-liberal monetarist concept which neglects this lesson, many economists prefer the Keynesian recipe. However, since global crises need global solution, and the spread of conspicuous consumption modify the demand constraint, its application must be adjusted to reality, and requires some global governance which may pave the way for a global oeco-social market economy.
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Bibliographic InfoArticle provided by Akadémiai Kiadó, Hungary in its journal Society and Economy.
Volume (Year): 35 (2013)
Issue (Month): 3 (September)
Note: This paper is mostly based on some earlier writings of the author, but brings the conclusions further and reflects his rethinking of the revisited topics in the light of new phenomena, and under the spiritual influence of the excellent booklet of Richard Jolly et al. (2012).
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Find related papers by JEL classification:
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
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