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Banking, Monetary Policy and the Political Economy of Financial Regulation

Banking, Monetary Policy and the Political Economy of Financial Regulation

Essays in the Tradition of Jane D'Arista

Edited by Gerald A. Epstein, Tom Schlesinger and Matías Vernengo

The many forces that led to the economic crisis of 2008 were in fact identified, analyzed and warned against for many years before the crisis by economist Jane D’Arista, among others. Now, writing in the tradition of D’Arista's extensive work, the internationally renowned contributors to this thought-provoking book discuss research carried out on various indicators of the crisis and illustrate how these perspectives can contribute to productive thinking on monetary and financial policies.

Chapter 2: Introduction

Gerald A. Epstein, Tom Schlesinger and Matías Vernengo

Subjects: economics and finance, financial economics and regulation, political economy, politics and public policy, political economy


Most of the essays in this volume were first presented in May 2008 at a conference and celebration held in honor of Jane D’Arista at the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst. The Great Financial Crisis had been emerging since at least the winter of 2007, but the full-blown global emergency that hit with the collapse of Lehman Brothers and AIG had not yet occurred. Still, those at the conference were acutely aware that the world was at an economic conjuncture of historic magnitude and that Jane D’Arista had for years been identifying, analyzing and warning against many of the forces that had led to that very moment. We did not publish these papers earlier partly because so many of those assembled, including Jane herself, have been in high gear trying to understand and, equally importantly, trying to devise responses to the economic crisis, which has persisted since the May 2008 celebration as the responses of governments in the US and Europe grew ever more perverse. Austerity has become the dominant policy in Europe and to some extent in the US even as unemployment remains criminally high and is rising to emergency levels in parts of Europe. One slight sliver of hope has, ironically, come from the response of some key central banks – much too late and timid, but compared with the collapse of stimulative fiscal policy, very welcome nonetheless.