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Economics After the Crisis: Objectives and Means (Lionel Robbins Lectures)

von Adair Turner

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The global economic crisis of 2008-2009 seemed a crisis not just of economic performance but also of the system's underlying political ideology and economic theory. But a second Great Depression was averted, and the radical shift to New Deal-like economic policies predicted by some never took place. Perhaps the correct response to the crisis is simply careful management of the macroeconomic challenges as we recover, combined with reform of financial regulation to prevent a recurrence. In Economics After the Crisis, Adair Turner offers a strong counterargument to this somewhat complacent view. The crisis of 2008-2009, he writes, should prompt a wide set of challenges to economic and political assumptions and to economic theory. Turner argues that more rapid growth should not be the overriding objective for rich developed countries, that inequality should concern us, that the pre-crisis confidence in financial markets as the means of pursuing objectives was profoundly misplaced.… (mehr)
***Guns; Germs; and Steel: The Fates of Human Societies. Diamond (1) ***How Markets Fail. Cassidy (1) 23 Things They Don't Tell You About Capitalism. Chang (1) A Question of Balance: Weighing the Options on Global Warming Policies. Nordhaus (1) A Treatise on Probability. Keynes (1) An Assessment of the Long-Term Impact of Stronger Capital and Liquidity Requirements. Basel Committee on Banking Supervision. Bank of International Settlements report. 2010 (1) An Essay on the Nature and Significance of Economic Science. Robbins (1) An Institutional Theory of Movement and Reversal. Vayanos and Woolley. Paul Woolley Centre discussion paper 621. 2009 (1) Animal Spirits: How Human Psychology Drives the Economy; and Why It Matters for Global Capitalism. Akerlof and Shiller (1) Assessing the Macroeconomic Impact of the Transition to Stronger Capital and Liquidity Requirements. Macro Economic Assessment Group. Bank for International Settlements report. 2010 (1) Beyond Mechanical Markets: Asset Price Swings; Risk; and the Role of the State. Frydman and Goldberg (1) Collected Essays in Economic Theory; Volume I: Wealth and Welfare. Hicks (1) Credit Booms Gone Bust: Monetary Policy; Leverage Cycles; and Financial Crises; 1870-2008. Schularick and Taylor. NBER working paper 15512. 2009 (1) E-Book (1) Emerging Financial Markets and Early U.S. Growth. Rousseau and Sylla. NBER working paper 7448. 1999 (1) Existence of an Equilibrium for a Competitive Economy. Arrow and Debreu. Econometrica. 1954 (1) Finance and Growth: Schumpeter Might Be Right. King and Levine. Quarterly Journal of Economics. 1993 (1) Globalizing Capital: A History of the International Monetary System. Eichengreen (1) Has Financial Development Made the World Riskier? Rajan. paper presented at Kansas City Federal Reserve Annual Economic Policy Symposium. 2005 (1) Just Capital: The Liberal Economy. Turner (1) Market Volatility. Shiller (1) Population Priorities: The Challenge of Continued Rapid Population Growth. Turner. Philosophical Transactions of the Royal Society B. 2009 (1) The Capital Myth: The Difference Between Trade in Widgets and Dollars. Bhagwati. Foreign Affairs. 1998 (1) The Economics of Climate Change: The Stern Review. Stern (1) The General Theory of the Second Best. Lipsey and Lancaster. Review of Economic Studies. 1956-1957 (1) The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means. Soros (1) The Rise of the Meritocracy; 1870-2033: An Essay on Education and Equality. Young (1) This Time Is Different: Eight Centuries of Financial Folly. Reinhart and Rogoff (1) Uncertainty in Macroeconomic Policy Making--Art or Science? King. paper presented at Royal Society Conference on Handling Uncertainty in Science. 2010 (1) Why Did Financial Globalization Disappoint? Rodrik and Subramanian. IMF Staff Papers. 2009 (1)
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At the early stages of growth, growth matters a lot to human well-being; at the earlier stages of financial liberalization, financial liberalization stimulates growth and widens the range of choice available. Later in the development process, the last increment of extra growth matters much less to human welfare, and further financial liberalization is less likely to deliver increments in growth and more likely to produce the proliferation of rent-extraction opportunities.
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The global economic crisis of 2008-2009 seemed a crisis not just of economic performance but also of the system's underlying political ideology and economic theory. But a second Great Depression was averted, and the radical shift to New Deal-like economic policies predicted by some never took place. Perhaps the correct response to the crisis is simply careful management of the macroeconomic challenges as we recover, combined with reform of financial regulation to prevent a recurrence. In Economics After the Crisis, Adair Turner offers a strong counterargument to this somewhat complacent view. The crisis of 2008-2009, he writes, should prompt a wide set of challenges to economic and political assumptions and to economic theory. Turner argues that more rapid growth should not be the overriding objective for rich developed countries, that inequality should concern us, that the pre-crisis confidence in financial markets as the means of pursuing objectives was profoundly misplaced.

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