Recurring Financial Crises—The Fallouts

Hossein Askari () and Abbas Mirakhor
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Abbas Mirakhor: International Centre for Education in Islamic Finance (INCEIF)

Chapter 3 in The Next Financial Crisis and How to Save Capitalism, 2015, pp 35-46 from Palgrave Macmillan

Abstract: Abstract The fallouts of financial crises are severe. The problems are intertwined and the process of financialization and the runup in debt is an important cause of stagnant real wages, increasing income, wealth disparity, slower economic growth and the fuel for recurring financial crises. These are in large measure because of the changes wrought by financial sector interests and are related to the structure of the economy, economic policy, and the behavior of corporations. The dissipation of savings, the growth effects of increased indebtedness, increased share of financial sector profits, shifts in income away from workers, and lower retained profits of corporations tend to reduce long-run equilibrium growth. They have to be addressed in a comprehensive manner to be effective.

Keywords: bank failures; deleverage; foreclosures; recession; unemployment (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-54437-7_3

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DOI: 10.1057/9781137544377_3

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