Financial Crisis By Mainstream And Heterodox Economists

The occurrence of financial crises following financial reforms is attributed by mainstream economists to economic reforms being incomplete or to their incorrect sequencing. Briefly explain this argument. Focus your briefing note on the reasons advanced particularly by heterodox economists to criticize this argument. The purpose of this note is to briefly examine the different approaches in interpreting the financial crisis by mainstream and heterodox economists. To emphasize the drawbacks in the neoclassical (mainstream) view, and criticize it from the post-Keynesian (major heterodox) viewpoint. The latest financial crisis of 2008 and 2009 will definitely become a cornerstone in the history of economic though and, correspondingly, the development of capitalistic system. It is a turning point as the neoclassical (mainstream) theory that has seemingly been a driver of the late 30 years of development lacks the ability to comprehensively explain the causes of frequent economic downturns, and provide policy implications for preventing crisis from occurring again and again. However, the masterminds of the neoclassical school have suggested some reasonable arguments in favor of free markets, liberalized interest rates, trade, foreign direct investments, privatization, deregulation, and property rights summarized in the list of 10 reforms (John Williamson, 2004) and called for more financial liberalization policies. While the financial markets are liberalized and the realShow MoreRelatedThe Theories Of Economic Economics1417 Words   |  6 Pagessubject. Economists’ have different views on the world, and they cannot agree on a single viewpoint. There is the popular, mainstream economists, known as the neoclassical economist and there are the heterodox economists’ which covers the nonmainstream views. Although the mainstream economics is the one taught in school, its assumptions are there to achieve a certain outcome. The heterodox economist’s assumptions are based on the fact to eliminate extraneous factors. I believe that heter odox economicsRead MoreAnalysis Of The Book 23 Things They Don t Tell You About Capitalism ``1638 Words   |  7 Pagescent of economics is common sense made complicated† (Chang, 2011, p xviii). In his book, 23 Things They Don’t Tell You About Capitalism, Korean economist, Ha-Joon Chang, assaults economic orthodoxy and questions many theories and empirical facts that we take for granted. Written shortly after the ‘credit crunch’ of 2008, Chang argues that this economic crisis was created by the free-market ideology which has been dominant since the 1980s and attempts to remove our rose-tinted glasses that neo-liberalRead MoreThe Theory Of Economic Growth6096 Words   |  25 PagesThe theory of economic growth sparked a revolution that has touched most societies across the globe. (Need to finish the abstract) 2.0 Introduction The aim of this original piece of research is to contribute to the overall understanding of how financial development effects different sources of economic growth alongside the effectiveness of fiscal policy. In highlighting this research direction, a strong literature review is needed to indicate if any gaps exist. As the topic is well researched andRead MoreMacroeconomics Gdp5520 Words   |  23 PagesGross Domestic Product (GDP) or one of the other national accounts. Economists interested in long-run increases in output study economic growth. Advances in technology, accumulation of machinery and other capital, and better education and human capital all lead to increased economic output over time. However, output does not always increase consistently. Business cycles can cause short-term drops in output called recessions. Economists look for macroeconomic policies that prevent economies from slippingRead MoreGame Theory and Economic Analyst83847 Words   |  336 Pagesthe angle from which it is examined will ensure that Game Theory and Economic Analysis reaches a wide readership. As an established scholar in the area of game theory, Christian Schmidt has produced an authoritative book with contributions from economists of the very highest rank and proï ¬ le, some of them well known beyond the boundaries of the game-theoretic community. Christian Schmidt is Professor at the University of Paris-Dauphine. He has recently published La thà ©orie des jeux: essai d’interprà ©tationRead MoreOrganisational Theory230255 Words   |  922 PagesYork Times Agency for an extract from ‘Guatemala: supermarket giants crush farmers’ by Celia W. Dugger published in The New York Times 28th December 2004. We are grateful to the Financial Times Limited for permission to reprint the following material: Chapter 5 Example, Insurer plans to save  £10m in Indian job shift,  © Financial Times, 12 October 2004. We are grateful to the following for permission to use copyright material: Chapter 5 Case study, Adapted from Creating Sustainable Competitive Advantage: