Neoliberalism, growth and Accumulation - Essay Example

On the other hand, Japan went through a period of economic stagnation resulting from declining land prices while the unification of Germany also contributed to the slow economic growth in Europe. Essentially, all these observations imply that after the neoliberal changes that occurred from the perspective of the state and economy, the macroeconomic variables including inflation, interest and unemployment rates and aggregate outputs were affected (Glyn, 2006). In view of this, this paper will examine to what extent the macroeconomic variables of the neoliberal era are the result of neoliberal changes to the state and economy.

By the 1970s, neoliberalism was increasingly becoming the prominent governance form in many economies of the world with its political ideals of liberating markets from governmental influences and interferences (Kotz, 2002). Seen as another way of looking at finance-led capitalism, neoliberalism was adopted in the place of capitalism after 1978. Neoliberalism came into being as a theory of political-economic practices founded on the notion that the well-being of humans will be guaranteed when individual entrepreneurial skills and freedoms are liberated in institutional frameworks with private property rights and free markets (Harvey, 2005).

It follows, therefore, that neoliberal ideas and changes altered the way states operated and heavily promoted market-based economies that valued competition and efficiency highly. According to Campbell (2005), it was the exit of the state from its role in managing capital that led to the success of free markets and led to exceptional growth especially in the US. Therefore, financial liberalization led to growth in aspects such as consumption, investment in private business, financial internalization, land prices and technological productivity (Glyn, 2006).

However, it is imperative to note that such growth and stability was mainly in the US because globally, the economy was facing