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Elementi di novità, meccanismi noti e cause di fondo della recente crisi
[Elements of novelty, known mechanisms, and fundamental causes of the recent crisis]

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  • Russo, Alberto

Abstract

We firstly provide a brief description of the crisis episodes, from the 2007-8 "liquidity crisis" to the 2008-9 "global recession". Then, we discuss some possible interpretations of the recent evolution, focussing on diverse aspects of the crisis: from the "elements of novelty" (financial innovations and new practices of risk management) to "known mechanisms" (the pro-cyclicality of the credit supply and the role of finance in a monetary production economy) and its "fundamental causes" which, in our opinion, date back to the deregulation policies implemented in many countries during the last decades, starting from the US and the UK. These decisions have created new profit opportunities in various contexts, so promoting a renewed process of capitalist accumulation. This process has taken place at the cost of a wide-ranging increase of inequality and instability, thus implying a "crescendo" of crisis episodes (both at the national and the international level) until the more recent one. Accordingly, we think that the current crisis is linked to the underlying movements of capitalist accumulation (from the financiarization of advanced economies to the gradual shift of the centre of the world economy towards China and other Asian emerging countries), its functioning as a monetary production economy and its political dimension.

Suggested Citation

  • Russo, Alberto, 2010. "Elementi di novità, meccanismi noti e cause di fondo della recente crisi
    [Elements of novelty, known mechanisms, and fundamental causes of the recent crisis]
    ," MPRA Paper 21648, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:21648
    as

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    File URL: https://mpra.ub.uni-muenchen.de/21648/1/MPRA_paper_21648.pdf
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    References listed on IDEAS

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    1. Antonelli, Cristiano, 2009. "Appunti per una lettura schumpeteriana della crisi e implicazioni di politica economica," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 200914, University of Turin.
    2. Bernanke, Ben S. & Gertler, Mark & Gilchrist, Simon, 1999. "The financial accelerator in a quantitative business cycle framework," Handbook of Macroeconomics,in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 21, pages 1341-1393 Elsevier.
    3. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 1065-1188, November.
    4. Domenico Delli Gatti & Mauro Gallegati & Bruce C. Greenwald & Alberto Russo & Joseph E. Stiglitz, 2008. "Financially Constrained Fluctuations in an Evolving Network Economy," NBER Working Papers 14112, National Bureau of Economic Research, Inc.
    5. Bruce C. Greenwald & Joseph E. Stiglitz, 1993. "Financial Market Imperfections and Business Cycles," The Quarterly Journal of Economics, Oxford University Press, vol. 108(1), pages 77-114.
    6. Domenico Delli Gatti & Mauro Gallegati & Bruce Greenwald & Alberto Russo & Joseph Stiglitz, 2009. "Business fluctuations and bankruptcy avalanches in an evolving network economy," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 4(2), pages 195-212, November.
    7. Delli Gatti, Domenico & Gallegati, Mauro & Greenwald, Bruce & Russo, Alberto & Stiglitz, Joseph E., 2006. "Business fluctuations in a credit-network economy," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 370(1), pages 68-74.
    8. Reinhart, Carmen & Rogoff, Kenneth, 2009. "This Time It’s Different: Eight Centuries of Financial Folly-Preface," MPRA Paper 17451, University Library of Munich, Germany.
    9. Freeman, Alan, 2009. "What makes the US Profit Rate Fall?," MPRA Paper 14147, University Library of Munich, Germany.
    10. Merih Uctum & Sandra Viana, 1999. "Decline in the US profit rate: a sectoral analysis," Applied Economics, Taylor & Francis Journals, vol. 31(12), pages 1641-1652.
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    Cited by:

    1. Russo, Alberto, 2011. "La crisi, le sue origini e il prossimo futuro
      [The crisis, its origins, and the next future]
      ," MPRA Paper 34742, University Library of Munich, Germany.
    2. Russo, Alberto & Zanini, Adelino, 2010. "On the expansion of finance and financialisation," MPRA Paper 26828, University Library of Munich, Germany.

    More about this item

    Keywords

    deregulation; capitalist accumulation; inequality; instability; crisis;

    JEL classification:

    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • P17 - Economic Systems - - Capitalist Systems - - - Performance and Prospects
    • G01 - Financial Economics - - General - - - Financial Crises

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