What Have We Learnt?
Edited by Steven Kates
Chapter 11: Economics in the Mirror of the Financial Crisis
11. Economics in the mirror of the financial crisis* Rodolfo Signorino 1 INTRODUCTION Famously, for Hegel ( 2001: 20) ‘[t]he owl of Minerva takes its flight only when the shades of night are gathering’, that is, philosophical reflection on the world runs behind the unfolding of events and is possible only post festum. Now that the world economy seems to be on the road to recovery from the global crisis which started about three years ago, conditions are favourable to the emergence of a less involved reflection on its possible causes in order to draw some useful lessons for the future. Another interesting subject to investigate is the search for economists’ responsibility in the current events. Why were economists unable to foresee the crisis? Did mainstream economics influence regulatory and control policies in financial markets so as to favour (or at least, not hinder) the onset of the crisis? Has the crisis shown that heterodox economics, particularly that of Keynesian inspiration, is endowed with a better explanatory power than orthodox economics? Thorough analysis of the causes of the crisis and well thought-out answers to the above questions are yet to emerge from the ongoing debate. The actual dimensions of the phenomenon under study, in fact, will probably induce many non-economists and economists alike to a second thought on what, till a little while ago, appeared as established notions. The former (non-economists) may well wish to change their mind about the widespread belief according to which accepted economic theory considers...
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