Preconditions of world economic crisis and needs for qualitative changes in economic theory and practise

Vladimir J. Marija J. Jovanoviæ, Jovanoviæ
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Vladimir J. Marija J. Jovanoviæ, Jovanoviæ: Pravni fakultet za privredu i pravosuðe, Univerzitet privredna akademija, Novi Sad; College of Economics and Administration, Belgrade

No 2014-03, Ekonomika, Journal for Economic Theory and Practice and Social Issues from „Ekonomika“ Society of Economists, Niš (Serbia)

Abstract: TMain thesis of this work is that international financial crisis which occurred in 2007 and 2008 year, is only last in line of negative economic events, that rises from theory because of which economy has stopped to examine the phenomena from the rel world and become ideologue based on mathematics. Even those crises where initiated by cutting real wages in many countries in the economic periphery, in Latin America in the late 1970s, those roots can be followed in economic theory in 1950,s when empirical reality has become unpopular in academic circles. On a half development of that theoretical tsunami – from it beginning,s in 1970,s till contemporary financial crises – we supervene on destruction of production capacities of ex Soviet Union. Now it returns back like boomerang – the fading of wealth and social problems are reaching Europe and United States of America. This work represents thesis that these events has to be seen as continuous operation enforce of neoclassical and neo - liberal economics policy's that destroyed real wages and wealth. Processes that took more than three decades. Precondition for reconstruction of system of widespread welfare is apprehension that downfall of widespread welfare is not caused by market failure, but rather by theory failure.

Keywords: economic crisis; crisis roots; market failure; financial crash; widespread welfare (search for similar items in EconPapers)
JEL-codes: B52 F50 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2014-10
New Economics Papers: this item is included in nep-hpe and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:esb:castrc:2014-311

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