The Terrible Simplifers: Common Origins of Financial Crises and Persistent Poverty in Economic Theory and the new ‘1848 Moment’
One element explaining the financial crisis is what Hyman Minsky called ‘destabilizing stability’: 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 simplifications’). This leads to turning points towards more relevant economic theories, referred to as ‘1848 moments’. The paper further outlines the key variables that need to be re-introduced into economic theory in order to furnish poor countries with the type of productive structures that makes it possible to eliminate poverty.
|Date of creation:||Dec 2009|
|Contact details of provider:|| Web page: http://www.un.org/en/development/desa/working-papers.html|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mario Cimoli & Giovanni Dosi & Joseph E. Stiglitz, 2008. "The Political Economy of Capabilities Accumulation: the Past and Future of Policies for Industrial Development. A Preface," LEM Papers Series 2008/15, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Jan KREGEL, 2004. "External Financing For Development And International Financial Instability," G-24 Discussion Papers 32, United Nations Conference on Trade and Development.
- Frank D. Graham, 1923. "Some Aspects of Protection Further Considered," The Quarterly Journal of Economics, Oxford University Press, vol. 37(2), pages 199-227.
- repec:eme:jespps:v:26:y:1999:i:4/5:p:268-326 is not listed on IDEAS
- Santiago Roca & Luis Simabuko, 2004. "Natural Resources, Industrialization and Fluctuating Standards of Living in Peru, 1950–1997: A Case Study of Activity-Specific Economic Growth," Chapters, in: Globalization, Economic Development and Inequality, chapter 5 Edward Elgar Publishing.
- Erik S. Reinert, 2009. "Emulation versus Comparative Advantage: Competing and Complementary Principles in the History of Economic Policy," The Other Canon Foundation and Tallinn University of Technology Working Papers in Technology Governance and Economic Dynamics 25, TUT Ragnar Nurkse School of Innovation and Governance.
- Paul A. Samuelson, 2005. "Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization: Response," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 242-244, Summer.
- Wolfgang Drechsler, 2004. "Natural versus Social Sciences: On Understanding in Economics," Chapters, in: Globalization, Economic Development and Inequality, chapter 2 Edward Elgar Publishing.
- Deepak Nayyar, 2008. "Learning to Unlearn from Development," Oxford Development Studies, Taylor & Francis Journals, vol. 36(3), pages 259-280.
- Erik S. Reinert & Rainer Kattel, 2009. "The Economics of Failed, Failing, and Fragile States: Productive Structure as the Missing Link," The Other Canon Foundation and Tallinn University of Technology Working Papers in Technology Governance and Economic Dynamics 18, TUT Ragnar Nurkse School of Innovation and Governance.
When requesting a correction, please mention this item's handle: RePEc:une:wpaper:88. 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: (Aimee Gao)
If references are entirely missing, you can add them using this form.