Explaining the Financial and Economic Crises
New Directions in Modern Economics series
Edited by Eckhard Hein, Daniel Detzer and Nina Dodig
This book explores and reviews the literature on the long-run transition towards finance-dominated capitalism, and the implications for macroeconomic and financial stability and, in particular, for the recent global financial and economic crises. In our view, the recent crises indicate the demise of finance-dominated capitalism. This does not mean that the dominance of finance will necessarily disappear – quite the opposite, in fact, as it seems presently. But, against the background of the analyses presented in this book, it is difficult to imagine that finance-dominated capitalism in the future will be able to generate sustainable high growth rates in the mature capitalist economies. The advanced capitalist economies have gone through two distinct regimes or stages of development since the end of the Second World War. The ‘golden age’ period of the 1950s and 1960s was characterized by relatively high growth rates, low unemployment and low inflation.