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Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky

This article provides a historical and theoretical overview of the mechanism leading up to financial crises and financial bubbles. It suggests that the potentially explosive growth of the financial sector at the expense of the real economy fed by compound interest has-since before ancient mesopotami...

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Main Author: Erik S.Reinert,
Format: Article
Published: Penerbit Universiti Kebangsaan Malaysia 2012
Online Access:http://journalarticle.ukm.my/5833/
http://www.ukm.my/penerbit/jem.htm
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spelling my-ukm.journal.58332013-01-14T01:41:58Z http://journalarticle.ukm.my/5833/ Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky Erik S.Reinert, This article provides a historical and theoretical overview of the mechanism leading up to financial crises and financial bubbles. It suggests that the potentially explosive growth of the financial sector at the expense of the real economy fed by compound interest has-since before ancient mesopotamia under the rule of Hammurabi-represented a real threat for such crises. A more modern and additional factor that builds up crises is Joseph Schumpeters observation of the clustering of innovations.Carlota Perez has more recently developed Schumpeters vision into a theory of techno-economic paradigms which - about midway in their trajectory-produce a build-up to financial crises. The theories of Schumpeterian economist Hyman Minsky, which describe the mechanisms leading to the collapse of financial bubbles, complete the overview. The article ends with recommendations to bring the West out of the present crisis by - once again -putting the real economy, rather than the financial economy, in the drivers seat of capitalism. Penerbit Universiti Kebangsaan Malaysia 2012-06 Article PeerReviewed Erik S.Reinert, (2012) Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky. Jurnal Ekonomi Malaysia, 46 (1). pp. 85-100. ISSN 0127-1962 http://www.ukm.my/penerbit/jem.htm
institution Universiti Kebangsaan Malaysia
building Perpustakaan Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
description This article provides a historical and theoretical overview of the mechanism leading up to financial crises and financial bubbles. It suggests that the potentially explosive growth of the financial sector at the expense of the real economy fed by compound interest has-since before ancient mesopotamia under the rule of Hammurabi-represented a real threat for such crises. A more modern and additional factor that builds up crises is Joseph Schumpeters observation of the clustering of innovations.Carlota Perez has more recently developed Schumpeters vision into a theory of techno-economic paradigms which - about midway in their trajectory-produce a build-up to financial crises. The theories of Schumpeterian economist Hyman Minsky, which describe the mechanisms leading to the collapse of financial bubbles, complete the overview. The article ends with recommendations to bring the West out of the present crisis by - once again -putting the real economy, rather than the financial economy, in the drivers seat of capitalism.
format Article
author Erik S.Reinert,
spellingShingle Erik S.Reinert,
Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky
author_facet Erik S.Reinert,
author_sort Erik S.Reinert,
title Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky
title_short Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky
title_full Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky
title_fullStr Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky
title_full_unstemmed Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky
title_sort mechanisms of financial crises in growth and collapse;hammurabi,schumpeter,perez, and minsky
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2012
url http://journalarticle.ukm.my/5833/
http://www.ukm.my/penerbit/jem.htm
_version_ 1643736558623260672
score 13.211869

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