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://journalarticle.ukm.my/5833/

id	ukm-5833
recordtype	eprints
spelling	ukm-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
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
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://journalarticle.ukm.my/5833/
first_indexed	2023-09-18T19:45:16Z
last_indexed	2023-09-18T19:45:16Z
_version_	1777405858361114624

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

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