Stable Growth in an Era of Crises: Learning from Economic Theory and History

Joseph E. Stiglitz

TR EN

Stable Growth in an Era of Crises: Learning from Economic Theory and History

Öz

The financial crisis and the Great Recession to which it gave rise exposed the deep flaws in standard macro-economic models, and in the way those models were deployed. In this paper, based on a talk given to the Turkish Economic Association in November 2012, Joseph E. Stiglitz discusses the range of these deficiencies and the ways in which the models must be reformed. The paper first examines five particular issues in the current policy debate and explains why the standard model provides a misguided framework for addressing them. The paper identifies the fundamental flaws in the standard model, and argues that in trying to fine tune the models for “normal” periods, it failed to address the more profound question of how to explain deep downturns, including slow recoveries. A central lacuna is the lack of attention to credit and the institutions providing it. It explains how a better understanding of banks would have led to better ways to recapitalize the banking system than those employed in the aftermath of the crisis. Finally, the paper relates all of these issues to the ongoing Euro crisis, showing in particular that the structure of the euro, though seemingly designed to improve the efficiency of resource allocations, has actually created an unstable and inefficient system.

Anahtar Kelimeler

State of macroeconomics, macroeconomic models and their deficiencies, economic crises, macroeconomic policies, recapitalization of the banking system, the Euro crisis.

Stable Growth in an Era of Crises: Learning from Economic Theory and History

Öz

The financial crisis and the Great Recession to which it gave rise exposed the deep flaws in standard macro-economic models, and in the way those models were deployed. In this paper, based on a talk given to the Turkish Economic Association in November 2012, Joseph E. Stiglitz discusses the range of these deficiencies and the ways in which the models must be reformed. The paper first examines five particular issues in the current policy debate and explains why the standard model provides a misguided framework for addressing them. The paper identifies the fundamental flaws in the standard model, and argues that in trying to fine tune the models for “normal” periods, it failed to address the more profound question of how to explain deep downturns, including slow recoveries. A central lacuna is the lack of attention to credit and the institutions providing it. It explains how a better understanding of banks would have led to better ways to recapitalize the banking system than those employed in the aftermath of the crisis. Finally, the paper relates all of these issues to the ongoing Euro crisis, showing in particular that the structure of the euro, though seemingly designed to improve the efficiency of resource allocations, has actually created an unstable and inefficient system.

Anahtar Kelimeler

State of macroeconomics, macroeconomic models and their deficiencies, economic crises, macroeconomic policies, recapitalization of the banking system, the Euro crisis.

Teşekkür

Paper presented to the Turkish Economic Association on November 2, 2012. This lecture is based on joint research over a long period of time with Bruce Greenwald, to whom I am greatly indebted. It builds on Stiglitz (2011). I am also indebted to Arjun Jayadev and Rob Johnson for discussions on the issues raised in this lecture. Financial support from the Institute for New Economic Thinking (INET) is gratefully acknowledged.

Kaynakça

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Baker, Dean, (2010), "The Myth of Expansionary Fiscal Austerity," CEPR, Washington, DC.
Battiston, Stefano, Domenico Delli Gatti, Bruce Greenwald, and Joseph E. Stiglitz, (2007), “Credit Chains and Bankruptcy Propagation in Production Networks,” Journal of Economic Dynamics and Control, 31(6), pp. 2061-2084.
Battiston, Dominico Delli Gatti, Mauro Gallegati, Bruce Greenwald, and Joseph E. Stiglitz, (2012a), “Liaisons Dangereuses: Increasing Connectivity, Risk Sharing, and Systemic Risk,” Journal of Economic Dynamics and Control, 36, pp. 1121-1141.
Battiston, Stefano, Dominico Delli Gatti, Mauro Gallegati, Bruce Greenwald, and Joseph E. Stiglitz, (2012a), “Liaisons Dangereuses: Increasing Connectivity, Risk Sharing, and Systemic Risk”, Journal of Economic Dynamics and Control, 36, pp. 1121-1141.
Battiston, Stefano, Dominico Delli Gatti, Mauro Gallegati, Bruce Greenwald, and Joseph E. Stiglitz, (2012b), “Default Cascades: When Does Risk Diversification Increase Stability", Journal of Financial Stability, 8 (3), pp. 138-149.
De Masi, G., Y. Fujiwara, M. Gallegati, and B. Greenwald and J. E. Stiglitz, (2011), “An Analysis of the Japanese Credit Network”, Evolutionary and Institutional Economics Review, 7 (2), pp, 203-232.
Delli Gatti, Domenico, Mauro Gallegati, Bruce Greenwald, Alberto Russo, and Joseph E. Stiglitz, (2006), “Business Fluctuations in a Credit- Network Economy”, Physica A, 370, pp. 68-74.
Delli Gatti, Domenico, Mauro Gallegati, Bruce Greenwald, Alberto Russo, and Joseph E. Stiglitz, (2012a), “Mobility Constraints, Productivity Trends, and Extended Crises”, Journal of Economic Behavior and Organization, 83 (3), pp.375-393.

Delli Gatti, Domenico, Mauro Gallegati, Bruce Greenwald, Alberto Russo, and Joseph E. Stiglitz, (2012b) “Sectoral Dislocations and Long-Run Cycles", in the Global Macro Economy and Finance, F. Allen, M. Aoki, J.-P. Fitoussi, N. Kiyotaki, R. Gordon and J. E. Stiglitz, eds., IEA Conference Volume 150 (3), Hounmills, UK and New York: Palgrave, pp. 61-97.
Field, Alexander, (2011) A Great Leap Forward: 1930s Depression and U.S. Economic Growth, New Haven: Yale University Press.
Gallegati, Mauro, Bruce Greenwald, Matteo Richiardi, and Joseph E. Stiglitz, (2008), “The Asymmetric Effect of Diffusion Processes: Risk Sharing and Contagion”, Global Economy Journal, 8 (3), Article 2, available at http://www.bepress.com/gej/vol8/iss3/2/ (accessed March 29, 2011).
Greenwald, Bruce and J. E. Stiglitz, (1986), Externalities in Economies with Imperfect Information and Incomplete Markets”, Quarterly Journal of Economics, Vol. 101, No. 2, May 1986, pp. 229-264.
Greenwald, Bruce and J. E. Stiglitz, (1987a), “Keynesian, New Keynesian, and New Classical Economics”, Oxford Economic Papers, 39, March 1987, pp.119-133.
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Greenwald, Bruce and J. E. Stiglitz, (1988a), “Information, Finance Constraints, and Business Fluctuations”, Symposium on Monetary Theory (Proceedings of Taipei), Institute of Economics, Academia Sinica, pp. 299-336.
Greenwald, Bruce and J. E. Stiglitz, (1988b), “Imperfect Information, Finance Constraints, and Business Fluctuations”, in Finance Constraints, Expectations, and Macroeconomics, M. Kohn and S.C. Tsiang, eds., Oxford: Oxford University Press, pp. 103-140.
Greenwald, Bruce and J. E. Stiglitz, (1988c), “Money, Imperfect Information, and Economic Fluctuations”, with B. Greenwald, in Finance Constraints, Expectations, and Macroeconomics, M. Kohn and S.C. Tsiang, eds., Oxford: Oxford University Press, pp.141-165.
Greenwald, Bruce and J. E. Stiglitz, (1990), “Macroeconomic Models with Equity and Credit Rationing”, in Asymmetric Information, Corporate Finance, and Investment, R. B. Hubbard, ed., University of Chicago Press, pp. 15-42.
Greenwald, Bruce and J. E. Stiglitz, (1993a), “Financial Market Imperfections and Business Cycles”, Quarterly Journal of Economics, 108 (1), pp. 77-114.
Greenwald, Bruce and J. E. Stiglitz, (2003), Towards a New Paradigm of Monetary Economics, Cambridge: Cambridge University Press.
Griffith-Jones, Stephany, (2013), “From Austerity to Growth in Europe: Some Lessons from Latin America”, In International Economic Association, Volume on the 2012 Pretoria, South Africa Roundtable on Industrial Policy.
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Ayrıntılar

Birincil Dil

İngilizce

Konular

Ekonomi

Bölüm

Araştırma Makalesi

Yazarlar

Joseph E. Stiglitz Bu kişi benim
United States

Yayımlanma Tarihi

1 Ocak 2013

Gönderilme Tarihi

1 Kasım 2012

Kabul Tarihi

-

Yayımlandığı Sayı

Yıl 2013 Cilt: 2 Sayı: 1

IZ

https://izlik.org/JA38JA35XE

APA

Stiglitz, J. E. (2013). Stable Growth in an Era of Crises: Learning from Economic Theory and History. Ekonomi-tek, 2(1), 1-39. https://izlik.org/JA38JA35XE

AMA

1.Stiglitz JE. Stable Growth in an Era of Crises: Learning from Economic Theory and History. Ekonomi-tek. 2013;2(1):1-39. https://izlik.org/JA38JA35XE

Chicago

Stiglitz, Joseph E. 2013. “Stable Growth in an Era of Crises: Learning from Economic Theory and History”. Ekonomi-tek 2 (1): 1-39. https://izlik.org/JA38JA35XE.

EndNote

Stiglitz JE (01 Ocak 2013) Stable Growth in an Era of Crises: Learning from Economic Theory and History. Ekonomi-tek 2 1 1–39.

IEEE

[1]J. E. Stiglitz, “Stable Growth in an Era of Crises: Learning from Economic Theory and History”, Ekonomi-tek, c. 2, sy 1, ss. 1–39, Oca. 2013, [çevrimiçi]. Erişim adresi: https://izlik.org/JA38JA35XE

ISNAD

Stiglitz, Joseph E. “Stable Growth in an Era of Crises: Learning from Economic Theory and History”. Ekonomi-tek 2/1 (01 Ocak 2013): 1-39. https://izlik.org/JA38JA35XE.

JAMA

1.Stiglitz JE. Stable Growth in an Era of Crises: Learning from Economic Theory and History. Ekonomi-tek. 2013;2:1–39.

MLA

Stiglitz, Joseph E. “Stable Growth in an Era of Crises: Learning from Economic Theory and History”. Ekonomi-tek, c. 2, sy 1, Ocak 2013, ss. 1-39, https://izlik.org/JA38JA35XE.

Vancouver

1.Joseph E. Stiglitz. Stable Growth in an Era of Crises: Learning from Economic Theory and History. Ekonomi-tek [Internet]. 01 Ocak 2013;2(1):1-39. Erişim adresi: https://izlik.org/JA38JA35XE

Stable Growth in an Era of Crises: Learning from Economic Theory and History

Öz

Anahtar Kelimeler

Stable Growth in an Era of Crises: Learning from Economic Theory and History

Öz

Anahtar Kelimeler

Teşekkür

Kaynakça

Ayrıntılar

Birincil Dil

Konular

Bölüm

Yazarlar

Yayımlanma Tarihi

Gönderilme Tarihi

Kabul Tarihi

Yayımlandığı Sayı

IZ

Kaynak Göster