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What Went Wrong? Alternative interpretations of the global financial crisis

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  • Jan Priewe

Abstract

This paper first reviews different interpretations of the global financial crisis of 2008-2009 (and its aftermath), focusing on the proximate causes in the financial sector of the United States. However, behind the immedi-ate causes lie ultimate causes without which the crisis cannot be properly understood. These were mainly the global imbalances in trade and in cross-border capital flows, the systemic root of which lies in what the pa-per refers to as a “new Triffin dilemma†. This dilemma relates to the shortcomings of the present global currency system that uses the United States dollar as the key reserve currency, which has to serve both national and global objectives. Other ultimate causes are the trend towards a finance-driven capitalism in many OECD countries, most pronounced in the United States, and the trend towards greater income inequality, which dampens aggregate demand and contributes to financial instability as well as global imbalances. The confluence of the proximate and ultimate causes paved the way for the crisis.

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  • Jan Priewe, 2010. "What Went Wrong? Alternative interpretations of the global financial crisis," Competence Centre on Money, Trade, Finance and Development 1002, Hochschule fuer Technik und Wirtschaft, Berlin.
    • Handle: RePEc:mtf:wpaper:1002
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    References listed on IDEAS

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    Cited by:

    1. Jan Priewe, 2011. "Die Weltwirtschaft im Ungleichgewicht Globale Zahlungsbilanzungleichgewichte - Ursachen, Gefahren, Korrekturen," Competence Centre on Money, Trade, Finance and Development 1103, Hochschule fuer Technik und Wirtschaft, Berlin.
    2. Olivier Mesly & David W. Shanafelt & Nicolas Huck, 2021. "Dysfunctional Markets: A Spray of Prey Perspective," Journal of Economic Issues, Taylor & Francis Journals, vol. 55(3), pages 797-819, July.
    3. Mladen Vedriš, 2015. "Razlozi, mogucnosti i sposobnosti za promjene u ekonomskoj politici u RH," Ekonomija Economics, Rifin d.o.o., vol. 22(1), pages 89-114.
    4. Zvonimir Savic, 2015. "EU fondovi i Junckerov program kao poticajni alati investicija i ukupnog gospodarskog razvoja," Ekonomija Economics, Rifin d.o.o., vol. 22(1), pages 53-74.
    5. Mirjana cizmovic & Jelena Jankovic & Milenko Popovic, 2015. "Growth Anatomy of Croatian Economy," Ekonomija Economics, Rifin d.o.o., vol. 22(1), pages 159-216.
    6. repec:eff:ekoeco:v:22:y:2015:i:1:p:115-137 is not listed on IDEAS
    7. Jonathan E. Ogbuabor & Anthony Orji & Gladys C. Aneke & Manasseh O. Charles, 2019. "Did the global financial crisis alter the oil–gasoline price relationship?," Empirical Economics, Springer, vol. 57(4), pages 1171-1200, October.
    8. Kolev, Kaloyan, 2016. "Глобалната Икономическа Криза И Поведенческият Икономикс [The Global Economic Crisis and Behavioral Economics]," MPRA Paper 114570, University Library of Munich, Germany.
    9. repec:eff:ekoeco:v:11:y:2005:i:3:p:392-424 is not listed on IDEAS
    10. Guste Santini, 2015. "Porez na dodanu vrijednost - porez buducnostic," Ekonomija Economics, Rifin d.o.o., vol. 22(1), pages 23-52.
    11. Neven Vidakovic & Dubravko Radoševic, 2015. "Kretanje kapitala u Hrvatskoj 2009. - 2015. - Opcije za izbor novog ekonomskog modela Hrvatske -," Ekonomija Economics, Rifin d.o.o., vol. 22(1), pages 115-134.
    12. Nikša Grgurevic, 2015. "Uzroci i posljedice reprodukovanja institucionalnog vakuuma u državama Jugoistocne Evrope," Ekonomija Economics, Rifin d.o.o., vol. 22(1), pages 231-243.
    13. Mimo Draškovic & Lakic Slobodan & Veselin Draškovic, 2015. "Kljucni problemi Crne Gore na putu pridruživanja EU," Ekonomija Economics, Rifin d.o.o., vol. 22(1), pages 217-230.
    14. Dragoljub Stojanov, 2015. "The Scope, Challenges and Perspective of Croatian Development Policy in the Context of the EU Destiny," Ekonomija Economics, Rifin d.o.o., vol. 22(1), pages 75-88.
    15. Sofija Adžic, 2015. "Zaokret iz recesije ka ekonomskom razvoju sa novim tokom reindustrijalizacije u regionu," Ekonomija Economics, Rifin d.o.o., vol. 22(1), pages 135-158.
    16. Damir Novotny, 2015. "Fiskalna politika i kriza hrvatskog gospodarstva - u potrazi za rješenjima-," Ekonomija Economics, Rifin d.o.o., vol. 22(1), pages 1-22.

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