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It is without any doubt that the recent financial crisis, being the worst since the great Depression of 1930s came as a shock for the field of economics. Additionally, the fact that economists have for long disagreed about the various policy implications of their work makes the…
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Download file to see previous pages... However, it is worth observing the fact that despite the crisis, for the Neo-Classics, they responded through defending their position and even made it clear that the crisis was a confirmation of their view.
It is understandable that the disunity amongst economists become more pronounced after the economic and the financial crisis mainly due to the resemblance of the recent financial crisis to the great depression of 1930s in both policy orientation and on doctrine issues. During the principle policy problem of the 1930s was unemployment which was then traced to rigidities which prevented the free working of the capitalist system and it was then determined that the major rigidity was obstruction too the downward movement of wages, making the crisis a matter of confidence which could not find cure either on fiscal or monetary expansion.
Looking at the current crisis, it is evident that the crisis was triggered by the collapse in the banking system which was a big wake up call for the Neo-classical mainstream economists as it was a clear proof of ill preparation for the crisis owing to the cold shoulder extended to the financial sector. However, on the other hand, the New Keynesians and the New Institutional Economists were presented with the first opportunity to employ the use of fiscal and monetary expansion to halt the contraction of the financial sector. Therefore, theoretically, as a matter of fact, neither economics nor the special branch of economic history is capable is capable of doing its work entirely without help from the neo-classical theory.
The last quarter a century has seen the economy-environmental dynamic become subject to the concept of the environment and humans. The last decade has seen an increase in alarming abuse of and exerting of excessive pressure on the environment resulting into a devastation on a grand scale most notably in the developing countries. Most of these instances have ...Download file to see next pagesRead More
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