The Dynamics of Policy Innovation and Paradigmatic Change
Edited by Hideko Magara
Chapter 4: Economic crises and growth regimes
The financial crisis of 2008 has developed into the Euro Zone crisis. In an initial phase of this long-lasting world economic crisis, we saw the breakdown of the American model of financial capitalism headed by investment banks. What type of capitalism was this collapsed financial capitalism or the finance-led growth model? Before the US economy became a finance-led one, what type of capitalism prevailed there? In the near future, what type of socioeconomic system will replace the finance-led one? These questions presuppose historical changes in American capitalism itself; thus, we face a question concerning the historical change or dynamics in time of capitalism. What is the economic state of other countries? Japan and Germany, for example, have also suffered from changes brought about by the financial crisis. These two countries, however, did not adopt the finance-led model à l'américaine; rather, they follow an export-led or industry-led capitalism model. They were not on a market-led trajectory but on a state-led or firm-led one. What about the Nordic, East Asian and Latin American countries, and emerging countries such as Brazil, Russia, India and China (BRIC)? Additionally, why do Euro Zone countries show such varied responses to the present crisis? The models inherent in these countries' economies can never be equated with the American model, regardless of the talk of 'globalization' and 'convergence across the world' among growth models. Euro Zone countries should vary greatly in terms of their economic structures.
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