The Great Recession
The chapter presents the main aspects of the US financial and real crises that subsequently spread to many other industrialized countries. The great recession originated from the 2007 US sub-prime crisis, which however had several deeper causes: the structural difficulties in the US balance of current accounts, the rising economic inequalities, and the mismanagement of monetary and housing policies. The latter had favored the asset inflation both in the construction industry and in the financial market. The rapid transition from the monetary to the real crises is mainly explained through a series of critical stock-flow feedbacks or vicious circles. Some remedies to avoid other future great financial and real crises are proposed. The chapter is concluded by a comparison between some important aspects of the great depression of the 1930s and the great recession.
KeywordsGreat financial crises The causes of the US sub-prime financial crisis From the financial crisis to the real crisis Stock-flow relations and the main vicious circles Remedies against financial crises A comparison between the great depression and the great recession
- Akerlof, G.A., and R.J. Shiller. 2010. Animal Spirits, How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism. Princeton: Princeton University Press.Google Scholar
- Attali, J. 2008. La crisi, e poi? Roma: Fazi.Google Scholar
- Department of Commerce-BEA. 2018. Accessed May 10, 2018. http://www.bea.gov.
- Fratianni, M. 2008. Financial Crises, Safety Nets and Regulation. Report Held at the 49th Annual Meeting of the Italian Society of Economists, Perugia, 24–25 October.Google Scholar
- Krugman, P. 2009. The Return of Depression Economics and the Crisis of 2008. New York: W.W. Norton.Google Scholar
- NBER. 2018. Accessed May 10, 2018. www.nber.org.
- Roubini, N. 2008. The Rising Risk of a Systemic Financial Meltdown: The Twelve Steps to Financial Disaster. RGE Monitor, February 5.Google Scholar
- Stiglitz, J. 2010. Risk and Global Economic Architecture: Why Full Financial Integration May Be Undesirable. NBER Working Paper No. 15718.Google Scholar
- Valli, V. 2013. New Economic Policies in a Changing World: A Stock-Flow Approach. Annali della Fondazione Luigi Einaudi, Firenze, Olschki, XLVII: 37–53.Google Scholar
- ———. 2017. Economic Policies during the “Great Recession” in the United States and in the European Union: A Comparative and Critical View. Annals of the Fondazione Luigi Einaudi LI (2): 159–182.Google Scholar
- WID World. 2017. http://wid.world/country/usa/.
- World Bank. 2018. www.worldbank.org.