Advanced Search
MyIDEAS: Login

Recession, Depression, and Financial Crisis: Everything Economists Want to Know But Are Afraid to Ask

Contents:

Author Info

  • Graeme Donald Snooks

Abstract

Once again the economic experts are telling us that the current (October 2008) financial “crisis” will lead to a deep recession or depression. The financial press is even claiming that we are headed for “global meltdown”. Heard it all before? The last time was in 1998 when we were told that the financial difficulties in the East would generate the “East Asian meltdown”, which would last for at least a decade and would generate a “global economic crisis”. The economic summit called by President Bush for later in 2008 is reminiscent of the G7 and G22 meetings called to discuss similar issues in 1998. And yet nothing happened. Of course the financial gurus, such as Alan Greenspan were quick to claim the credit, but the truth is that financial crises are supply-side happenings that generate a lot of excitement among the stock market speculators but have little real-world fallout as long as the dynamic strategies being pursued by the world’s leading societies are viable. The stock market crash of 1987 is another case in point: nothing serious happened in the real economy. Depressions only occur when dominant dynamic strategies are finally exhausted and new ones are slow to emerge: as happened in the USA during the 1920s and 1930s. The conventional wisdom among the orthodox economic fraternity, that the Great Depression was the outcome of the 1929 Wall Street crash, is totally incorrect. Economists and their political masters will only understand the relationship between recession, depression, and financial crisis, when they have developed a realist general dynamic theory of human society. Until then, economic policy will be confused, ineffective, and distorting. A general dynamic theory is presented in this paper and used to analyse financial crises and economic downturns. To the degree that the real global economy is in trouble, it is due not to financial mismanagement, but to the misconceived policy of inflation targeting pursued for the past decade or so. Once again, our compulsion to intervene exceeds our capacity to understand the implications of our actions.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://sites.google.com/site/institutegds/home/workingpapers/WP007.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute of Global Dynamic Systems in its series GDSC Working Papers with number 007.

as in new window
Length:
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:auu:wpaper:007

Contact details of provider:
Postal: Canberra, ACT 0200
Phone: +61 2 6125 3807
Fax: +61 2 6125 0744
Email:
Web page: https://sites.google.com/site/institutegds
More information through EDIRC

Related research

Keywords: financial crisis; depression; dynamic-strategy theory; inflation targeting; economic policy; global meltdown.;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Costa Cabral, Nazare, 2010. "Breve guia temático e bibliográfico sobre o estudo da actual crise financeira e económica
    [Short thematic guide to the study of current financial and economic crisis]
    ," MPRA Paper 20743, University Library of Munich, Germany.
  2. Graeme Donald Snooks, 2009. "Climate Mitigation or Technological Revolution? A Critical Choice of Futures," GDSC Working Papers 010, Institute of Global Dynamic Systems.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:auu:wpaper:007. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Drew Treasure).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.