From Financial Crisis to Stagnation

Avoiding a Great Stagnation: The coming Great Stagnation; 9. The challenge of corporate globalization; Economists and the crisis: Markets and the common good: Financialization Thomas I Palley Inbunden. Skickas inom vardagar. The US economy today is confronted with the prospect of extended stagnation. This book explores why.

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Palley argues that the Great Recession and destruction of shared prosperity is due to flawed economic policy over the past thirty years. One flaw was the growth model adopted after that relied on debt and asset price inflation to fuel growth instead of wages. A second flaw was the model of globalization that created an economic gash.

This model held in the U. After the virtuous circle Keynesian model was replaced by a neoliberal growth model that severed the link between wages and productivity growth and created a new economic dynamic.

Before , wages were the engine of U. After , debt and asset price inflation became the engine. The new model was rooted in neoliberal economics and can be described as a neoliberal policy box that fences workers in and pressures them from all sides. Corporate globalization put workers in international competition via global production networks supported by free trade agreements and capital mobility.

The labor market flexibility agenda attacked unions and labor market supports such as the minimum wage, unemployment benefits, and employment protections.

Finally, the abandonment of full employment created employment insecurity and weakened worker bargaining power. This model was implemented on a global basis, in both North and South, which multiplied its impact. That explains the significance of the Washington Consensus which was enforced in Latin America, Africa, and former Communist countries by the International Monetary Fund and World Bank by making financial assistance conditional on adopting neoliberal policies.

The role of finance was to fill that gap. These three different perspectives make clear what is at stake as each recommends its own different policy response. For hardcore neoliberal government failure proponents the recommended policy response is to double-down on neoliberal policies by further deregulating financial and labor markets; deepening central bank independence and the commitment to low inflation; and further limiting government via fiscal austerity.

For softcore neoliberal market failure proponents the recommended policy response is to tighten financial regulation but continue with all other aspects of the existing neoliberal policy paradigm. That means continued support for corporate globalization, so-called labor market flexibility, low inflation targeting, and fiscal austerity.

For proponents of the destruction of shared prosperity hypothesis the policy response is fundamentally different. The goal is to take workers out of the box and put corporations and financial markets in so that they are made to serve the broader public interest. That requires replacing corporate globalization with managed globalization; restoring commitment to full employment; replacing the neoliberal anti-government agenda with a social democratic government agenda; and replacing the neoliberal labor market flexibility with a solidarity based labor market agenda.

Managed globalization means a world with labor standards, coordinated exchange rates, and managed capital flows. Advanced search Search history. Browse titles authors subjects uniform titles series callnumbers dewey numbers starting from optional. See what's been added to the collection in the current 1 2 3 4 5 6 weeks months years.

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Cite this Email this Add to favourites Print this page. Catalogue Persistent Identifier https: You must be logged in to Tag Records. Machine generated contents note: Goodbye Financial Crash, Hello Stagnation 2. The Tragedy of Bad Ideas 3. Three Perspectives on the Crisis 4.

Macroeconomic Causes of the Crisis 5. The Role of Finance 6. Myths and Fallacies about the Crisis: Stories about the Domestic Economy 7. Stories about the International Economy pt. The Coming Great Stagnation more The Coming Great Stagnation 9.

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Avoiding the Great Stagnation: Rethinking the Paradigm