Decoding Economic Crises

Constantly bandied about, 'crisis' has tended to be a much-overused word. Understanding the economy and its future challenges requires a detailed and precise analysis of what an economic crisis is. This book sets out to do just that. It first provides a deep historical context of what economic theory says about crises and their perpetual return in the form of a cycle. It then looks at what lessons might be learned from such cycles. Since 1945, the world economy has been dominated by the United States, so an analysis of recent crises must necessarily consider public policy response in this country. Decoding Economic Crises attempts to answer the question of whether American leadership has emerged unscathed from the damage inflicted by the 1975, 1992, 2009 and 2020 recessions and their legacies of debt. Looking forward to the future, there is a particular focus on environmental change. The book interrogates whether devastating crises might ensue, reminiscent of the 'nutritional trap' theorised by Nobel Prize winner Angus Deaton. Finally, Decoding Economic Crises asks if there will be a return to times of extreme scarcity as seen prior to the mid-18th century. https://www.worldscientific.com/worldscibooks/10.1142/q0446 Contents About the Authors Introduction Part I Can the Economy Exist Without Crises? Chapter 1 There Have Been Crises Since the Dawn of Time Chapter 2 Theoretical Analysis of Crises Defining a crisis Is a crisis a phase in the cycle? 1929 crisis: Keynes takes the stage Formalisation of cycle post-1929: Hansen and Samuelson provide another conception of Keynes’s general theory Real business cycle theory Crises herald permanent transformations: Regulation theory Chapter 3 Economic Cycle and Policy Fiscal policy comes into play Contesting fiscal policy Money and finance Foreign exchange policy in times of crisis Part II A History of Crises Chapter 4 The Great Depression and Debt Deflation The “Great Contraction” Chapter 5 The 1975 Recession The economic turning point Western countries and oil Chapter 6 1993 Crisis: OECD Employment Strategy Cyclical downturn: Fiscal policy to the rescue European specificity: EMS crisis OECD draws lessons from the crisis Chapter 7 2008 Crisis and Quantitative Easing Pauperisation of Americans and subprime mortgages The Great Recession G20 asserts itself The action of central banks Would Irving Fisher have wanted central banks to go to such lengths in 2008 to avoid deflation? Chapter 8 Exogenous Crises: Pandemics and Wars Pandemics Wars Conclusion Bibliography Index