Table of Contents

The Great Financial Meltdown

The Great Financial Meltdown

Systemic, Conjunctural or Policy Created?

New Directions in Modern Economics series

Edited by Turan Subasat

The Great Financial Meltdown reviews, advocates and critiques the systemic, conjunctural and policy-based explanations for the 2008 crisis. The book expertly examines these explanations to assess their analytical and empirical validity. Comprehensive yet accessible chapters, written by a collection of prominent authors, cover a wide range of political economy approaches to the crisis, from Marxian through to Post Keynesian and other heterodox schools.

Chapter 2: Roots of the current economic crisis: capitalism, forms of capitalism, policies and contingent events

David M. Kotz

Subjects: economics and finance, financial economics and regulation, radical and feminist economics


To understand a severe economic crisis such as that of 2008, it is not sufficient to analyze capitalism-in-general along with various economic policy decisions and contingent events. An adequate analysis requires taking account of the institutional form of capitalism. Capitalist economies have taken a variety of institutional forms over time and across space, and each such institutional form tends to be stable for an extended period of time. The roots of a severe economic crisis are to be found by analyzing the ways in which a particular institutional form of capitalism eventually produces obstacles to continuing capital accumulation. This approach to crisis theory is illustrated by an examination of the roots of the crisis that broke out in 2008 in the United States.

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