Skip to main content
main-content

Über dieses Buch

This book pleads for a new orientation of government economic policy, as well as central bank policy, rejecting the traditional government stabilization policy that leads to a dead-end of economic instability and social inequality in the long run.
Growing economic instability and increasing state stabilization characterize the development of the capitalist market economy since the major world economic crises of the last century. The book examines these crises and the measures states take to overcome them. Additionally, it addresses the effectiveness and consequences of state intervention. In presenting the main features of Keynes’ and Minsky’s macroeconomics, the book provides a conceptual basis for an outlook on government stabilization in a changing market economy. It thus also offers a suitable framework for current economic policy discussions. Finally, the book examines the wider context of economic history for lessons to be learned.
This book is a must-read for scholars and students of economics, as well as policy-makers and practitioners, interested in a better understanding of macroeconomics, central bank policy, and the results of state intervention.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction: Views on Economic Crises in the Twenty-First Century

Abstract
The book focuses on economic change and the state interventions. The permanently applied Keynesian stabilization policy causes debt to rise. Minsky sees the current heavily debt-financed economy as the source of growing economic instability. The central banks take measures to strengthen the flow of profits and support asset holdings. In doing so, they favor economic inequality. Their massive interventions in economic crises lead to distorted markets and an intertemporal imbalance. In view of these adverse developments, a reorientation of state interventions is urgently needed.
Ralf Pauly

Chapter 2. A Review of the History of the Economy and Its Concepts: Change Is a Constant

Abstract
This chapter gives a review of the economic history. Today, the ICT revolution unbundles national production processes and, with globalization, further drives economic change. Globalization has recently led to an international competitive struggle. A new perspective in their intervention policy is opening up for states. They can turn their attention more towards society: A strong knowledge-based society, together with innovative local companies, can bring new prosperity to the national economy from the bottom up.
Ralf Pauly

Chapter 3. Keynes’ and Minsky’s Macroeconomics

Abstract
In Minsky’s novel economic paradigm, unlike the Keynesian-influenced ISLM model, profits, private banks and debt financing play a central role. Minsky replaces the Keynesian relationship between investment and saving with the future-oriented interdependence between investment and profit. Profit is ultimately the focus of economic activity in the capitalist market economy. In good times, debt financing increases the chances of profit drastically through its leverage effect, but in bad times the risk of loss is even more drastic. Private banks, together with central banks, favor economic risks and make the economic process inherently unstable.
Ralf Pauly

Chapter 4. Outlook on the Transformation of the Market Economy and Its Stabilization

Abstract
Central banks remain the main players. Without a viable concept, they must intervene in the financial market in a variety of ways, with uncertain outcomes. Their actions are aimed at assuming economic risks from the private sector, encouraging the flow of profits and safeguarding wealth. Their interventions benefit the richer, the profit takers and the owners. They thus promote inequality. The capitalist market economy shows significant weakness. The state can only worsen the situation with its traditional stabilization policy. It must change its politics and find a new orientation.
Ralf Pauly

Chapter 5. Conclusion: Changing Economic Policies

Abstract
Two narratives tell us about the common welfare. The Smith narrative lets the invisible hand work in the market. In the Keynesian narrative, the state is the visible hand which intervenes in the economy for the common good. Economic change and its continuing stabilization are associated with instability, inequality, distorted markets and the threat of intertemporal imbalance. They narrow future perspectives. To make the future promising again, the state should realign its policies. It can turn its support to a knowledge-based society and innovative companies at a local level. In this way, the state can unleash forces of people at local level for new national welfare.
Ralf Pauly
Weitere Informationen

Premium Partner

    Bildnachweise