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http://hdl.handle.net/10419/59311
  
Title:Finance-dominated capitalism in crisis: The case for a Global Keynesian New Deal PDF Logo
Authors:Hein, Eckhard
Truger, Achim
Issue Date:2010
Series/Report no.:Working Paper, Institute for International Political Economy Berlin 06/2010
Abstract:We analyse the long-run imbalances of finance-dominated capitalism underlying the present crisis - which began in 2007 - with a focus on developments in the US and Germany. We argue that beyond inefficient regulation of the financial sector, the severeness of the present crisis has been mainly caused by increasing inequalities of income distribution and rising imbalances in the world economy associated with finance-dominated capitalism. From this it follows that in the near and not so near future, the US will no longer be able to act as the driving force for world demand. In order to avoid a period of deflationary stagnation in major parts of the world economy, we finally propose the policy package of a Global Keynesian New Deal which should consist of: 1. re-regulation of the financial sector, 2. re-orientation of macroeconomic policies along (Post-)Keynesian lines, and 3. re-construction of international macroeconomic policy coordination, in particular on the European level, and a new world financial order.
Subjects:Finance-dominated capitalism
financial crisis
macroeconomic policies
Global Keynesian New Deal
JEL:E32
E44
E61
E63
E65
Document Type:Working Paper
Appears in Collections:IPE Working Papers, Institute for International Political Economy, HWR Berlin

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