Imbalances and Crises

Robert Guttmann

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Abstract: We have over-powering evidence, gathered over centuries, that our capitalist system is subject to endemic imbalances, which, if large and/or persistent enough, lead to crisis. This is a recurrent pattern in which underlying imbalances and crises enter into a dialectical relationship, with crises serving here as adjustment processes that may (or may not) resolve the imbalances triggering them in the first place. Whereas orthodox economic theory tends to treat crises as exogenous shocks intruding from outside to upset our supposedly self-balancing system, we need to understand this phenomenon instead as intrinsic to capitalist economies. The key to such a reinterpretation effort is to pinpoint the imbalances which such a system gives rise to as a matter of its normal modus operandi.

Keywords: balance-of-payments crises; overproduction vs underconsumption; financial instability (search for similar items in EconPapers)
Date: 2016-07
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Published in Louis-Philippe Rochon & Sergio Rossi. An Introduction to Macroeconomics: A Heterodox Approach to Economic Analysis, Edgar Elgar, pp.336-358, 2016, 978 1 78254 936 9

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01345532

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