The Great Financial Meltdown
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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.
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Chapter 6: A global approach to the global financial crisis

John Weeks

Abstract

This chapter reaches several key conclusions about the global financial crisis. First, the advanced capitalist countries, the United States, United Kingdom, those in Western Europe and Japan are highly integrated through financial markets. While the United States has the largest economy in this group, it has not determined the economic performance of the others for several decades. These economies are integrated through trade and capital flows, but domestic conditions, random events and policies determine their medium-term growth performances. For none of them does a major crisis generate a crisis of global capitalism. Second, over the last 100 years capitalist countries have suffered many disruptions, most of which did not result in global disruptions. Those that did, worked their destruction through financial markets, and these became increasingly frequent after 1980. Third, at the national level the United States suffered from two disruptions that qualify for the term ‘crisis’, 1929–40 and 2008 to the present. The first did not generate crisis-level disruption in the other major capitalist countries, though to varying degrees all suffered lower rates of accumulation. The second crisis has struck all of the major capitalist countries of Europe, though not those in Latin America or Asia.

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