Market economies in crisis – mayor shift in the dominant macroeconomic paradigms
Journal
Political Thought (Magazine for Political and Societal Issues)
Date Issued
2009
Author(s)
Abstract
The contemporary global economic crisis has "stirred the waters" and made
many people wonder what it represents, where it came from and where it
leads us. In this paper we are going deeper, analyzing the shift in the dominant
economic paradigms as the cause for a global economic crisis that began in
developed market economies. The global economic crisis has changed the
balance between the two dominant macroeconomic conceptions - Keynesian
and neo-liberal, and created a need for the reconstruction of the core of
the contemporary economic science, policy and practice. In the fi rst part of
the paper we analyze the relationship between economic theory, economic
policy and economic practices in order to better understand the process of
the changing balance between the dominant macroeconomic paradigms and
the changes that are taking place in the economies affected by the crisis.
The second part will explore the relation between the 1930s, 1970s and the
contemporary economic crisis on the one hand, and the economic paradigms
shift on the other. The third part of the paper will be focused on the neo-liberal
economic paradigm which in the last two or three decades has dominated in
economic theory, policy and practice and is one of the main causes for today's
global economic crisis (starting from the concept and origins of neo-liberalism,
its fundamentals, the Washington Consensus as a neo-liberal manifesto and
the role of the neo-liberal conception in the fi nancial crisis that has shaken
the world). At the end, appropriate attention will be devoted to shaping the
relationship between the dominant economic paradigms under the impact of
the contemporary economic crisis, its implications on the economic policy and
practice, the future of the standard economic science and similar issues.
many people wonder what it represents, where it came from and where it
leads us. In this paper we are going deeper, analyzing the shift in the dominant
economic paradigms as the cause for a global economic crisis that began in
developed market economies. The global economic crisis has changed the
balance between the two dominant macroeconomic conceptions - Keynesian
and neo-liberal, and created a need for the reconstruction of the core of
the contemporary economic science, policy and practice. In the fi rst part of
the paper we analyze the relationship between economic theory, economic
policy and economic practices in order to better understand the process of
the changing balance between the dominant macroeconomic paradigms and
the changes that are taking place in the economies affected by the crisis.
The second part will explore the relation between the 1930s, 1970s and the
contemporary economic crisis on the one hand, and the economic paradigms
shift on the other. The third part of the paper will be focused on the neo-liberal
economic paradigm which in the last two or three decades has dominated in
economic theory, policy and practice and is one of the main causes for today's
global economic crisis (starting from the concept and origins of neo-liberalism,
its fundamentals, the Washington Consensus as a neo-liberal manifesto and
the role of the neo-liberal conception in the fi nancial crisis that has shaken
the world). At the end, appropriate attention will be devoted to shaping the
relationship between the dominant economic paradigms under the impact of
the contemporary economic crisis, its implications on the economic policy and
practice, the future of the standard economic science and similar issues.
Subjects
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