Advanced Search
MyIDEAS: Login to save this paper or follow this series

Financial Crises, Persistent Poverty, and the Terrible Simplifiers in Economics: A Turning Point Towards a New '1848 Moment'

Contents:

Author Info

  • Erik S. Reinert

Abstract

A key common element in persistent world poverty and in the financial and (real) economic crisis is the .terrible simplificationÿ . a theoretical overshooting into irrelevant abstractions . that has taken place in economic theory after World War II. As unlikely as it may initially sound, I shall endeavour to explain in this paper how . in spite of its apparent sophistication . equilibrium economics became .mathematized demagogueryÿ based on an extremely simplistic worldview. One element explaining the financial crisis is what Hyman Minsky called .destabilizing stabilityÿ: long periods of stability lead to increasing vulnerability. This paper argues that similar mechanisms are at work inside economics: long periods of economic progress in the core countries lead to increasingly abstract and irrelevant economic theories (.terrible simplificationsÿ). This leads to turning points towards more relevant economic theories, referred to as .1848 momentsÿ. The paper further outlines the key variables that need to be reintroduced into economic theory in order to furnish poor countries with the type of productive structures that makes it possible to eliminate poverty.

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://hum.ttu.ee/wp/paper22.pdf
Download Restriction: no

Bibliographic Info

Paper provided by TUT Ragnar Nurkse School of Innovation and Governance in its series The Other Canon Foundation and Tallinn University of Technology Working Papers in Technology Governance and Economic Dynamics with number 22.

as in new window
Length: 34 pages
Date of creation: May 2009
Date of revision:
Handle: RePEc:tth:wpaper:22

Contact details of provider:
Web page: http://www.ttu.ee/hum
More information through EDIRC

Related research

Keywords:

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

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:tth:wpaper:22. 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: (Oliver Lillepruun).

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.