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How to guide the economy in a socially desirable direction ? Lessons from the 2007 financial turmoil


  • Faruk Ülgen

    () (CREG - Centre de recherche en économie de Grenoble - UPMF - Université Pierre Mendès France - Grenoble 2 - UGA - Université Grenoble Alpes)


This article maintains that capitalist market economies have a threefold composite characteristic: (i) the central role of money and financial relations; (ii) the crucial role of institutional patterns; and (iii) the macro-nature of stability and viability concerns. It makes social control a consistent way of designing an efficient macro environment. Institutional economics precisely relies on such a triptych, and reveals to be an appropriate theoretical and practical reference to deal with today's major economic issues, such as the 2007-2008 systemic crisis. The article suggests, therefore, an institutional analysis that points to the role of the institutional-regulatory framework, and the rationale of social control principles in the stabilization of the working of capitalist finance. It then advocates for an alternative organization of the banking and financial system to ensure systemic sustainability and to guide the economy in a socially desirable direction.

Suggested Citation

  • Faruk Ülgen, 2014. "How to guide the economy in a socially desirable direction ? Lessons from the 2007 financial turmoil," Post-Print halshs-01089365, HAL.
  • Handle: RePEc:hal:journl:halshs-01089365
    DOI: 10.2753/JEI0021-3624480234
    Note: View the original document on HAL open archive server:

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    Cited by:

    1. Faruk Ülgen, 2014. "Financialized capitalism and the irrelevance of self-regulation : a Minskyian analysis of systemic viability," Post-Print halshs-01111162, HAL.


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