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on Post Keynesian Economics |
| By: | Michele Fratianni (Department of Business Economics and Public Policy, Indiana University Kelley School of Business); Francesco Marchionne (Universita Politecnica delle Marche) |
| Abstract: | The ultimate point of origin of the great financial crisis of 2007-2009 can be traced back to an extremely indebted US economy. The collapse of the real estate market in 2006 was the close point of origin of the crisis. The failure rates of subprime mortgages were the first symptom of a credit boom tuned to bust and of a real estate shock. But large default rates on subprime mortgages cannot account for the severity of the crisis. Rather, low-quality mortgages acted as an accelerant to the fire that spread through the entire financial system. The latter had become fragile as a result of several factors that are unique to this crisis: the transfer of assets from the balance sheets of banks to the markets, the creation of complex and opaque assets, the failure of ratings agencies to properly assess the risk of such assets, and the application of fair value accounting. To these novel factors, one must add the now standard failure of regulators and supervisors in spotting and correcting the emerging weaknesses. Accounting data fail to reveal the full extent of the financial maelstrom. Ironically, according to these data, US banks appear to be still adequately capitalized. Yet, bank undercapitalization is the biggest stumbling block to a resolution of the financial crisis. |
| Keywords: | accounting, banks, credit, crisis, fair values, risk aversion, undercapitalization |
| JEL: | G21 N20 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iuk:wpaper:2009-02&r=pke |
| By: | Pilon, André Francisco |
| Abstract: | Quality of life, natural and man-made environments, physical, social and mental well-being are currently undermined by all sorts of hazards and injuries; political, economical, social and cultural disarray normalise atrocious behaviours and violence throughout the world. Considering the multiple problems of difficult settlement or solution in our times, current environmental, social, cultural, educational, political and economic policies and practices are examined in view of new paradigms of growth, power, wealth, work and freedom. A multidimensional ecosystemic approach and planning model integrate into a dynamic configuration four dimensions of being-in-the- world (intimate, interactive, social and biophysical), as they induce the events (deficits and assets), cope with consequences (desired or undesired) and reorganise for change. |
| Keywords: | education; culture; public policies; environment; ecosystems |
| JEL: | Q56 H75 I28 Z13 |
| Date: | 2009–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14932&r=pke |
| By: | Sergio, Reuben |
| Abstract: | The paper criticizes the conception of value on behalf of the conventional economic theory, blaming it for the current economic school’s incapacity to explain the actual economic crisis and to offer an adequate perspective to settle a solution. It proposes an explanation based on the tendency to concentration and centralization of capital’s accumulation and its effects on income distribution, which conforms inadequate and unbalanced structures of production and distribution, withdrawn from the appropri-ate and thorough use of scarce common resources. In the middle, long term, these structures determine ruptures in the process of accumulation of capital triggering crisis like the actual. The theory of regulation is used in this paper, in order to explain the growth of concentration and centralization of capital and of social gap during the last years, which is understood as the result of the crisis of Fordist regime of accumu-lation and of the surge of a new transnational regime. |
| Keywords: | Economic crisis; Financial crisis; Regulation theory; Regime of accumulation; Economic development; Social inequality; Economic theory; Political Economy; De-velopment theory; Economic equilibrium. |
| JEL: | P0 D50 D63 D33 O17 D43 P16 |
| Date: | 2009–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15048&r=pke |