The contemporary economic crisis is an extraordinary opportunity to test the relevance of economic theory. The first lesson to be learnt from this crisis is that economic theories are not abstract constructions, extraneous to the real world, but they produce significant consequences for the welfare of a society. In other words, economic theories can cause crises. Giancarlo Bertocco explains.
Tag Archives: economic crisis
December 23, 2013
We told ourselves that we know how economies work.
The economic crisis that began in 2008 showed how wrong we were.
The individualistic formalism of basic neoclassical economics had held sway in the World Bank and the IMF and in many government ministries. The crisis challenged its control of the commanding heights of policy and public debate, and many have called for a better view of economy to replace that neoclassical paradigm. […]
January 10, 2013
It is widely recognized that economic crises can sometimes trigger enormous change, both with regard to economic theory and the politics of governance. Today, the global economy is struggling with the fall-out from the financial crash of 2008 and the Great Recession of 2007-09. The economic crisis that these events have generated, combined with the failure of the mainstream economics profession, has again put the question of change on the table.