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'Two or three things I know about her': Europe in the global crisis and heterodox economics

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  • Riccardo Bellofiore

Abstract

Europe is in the middle of an economic and social storm. Although the turmoil since the mid-2008 originated elsewhere, the European dynamics may turn the Great Recession into a full-blown Great Depression. Within this dynamics, the faulty design of the 'single currency' is a key element, together with the neomercantilist fracture dividing the 'core' of Northern Europe and the 'periphery', mostly composed of Southern European countries. The paper gives a quick reminder of what the true nature of the global crisis is (Section 2). The neoliberal Great Moderation was a paradoxical kind of financial and 'privatised Keynesianism'. The heart of the Anglo-Saxon model has been the overcoming of the stagnationist tendencies emerging from 'traumatised workers' thanks to the transformation of 'manic savers' into 'indebted consumers'. I will then (Section 3) dissect the peculiarities of the neomercantilist export-led posture. The eventual establishment of the euro as the 'single currency' was in stark discontinuity with the Maastricht Treaty originating from the Delors Commission (Section 4). The real puzzle is to understand how the euro actually came into being from such fragile foundations, and also why for many years it seemed a happy experiment. The institutional setting of the eurozone and the German self-defeating obsession for fiscal austerity decisively drove the area into a double-dip recession. A way out of the crisis (Section 5) requires not only monetary reforms and expansionary coordinated fiscal measures, but also a wholesale change of economic model. This latter must be built upon a new 'engine' of demand and growth. A monetary finance of 'good' deficits is called for realising a radicalised 'socialisation of the investment': a class and Keynesian new deal. Copyright , Oxford University Press.

Suggested Citation

  • Riccardo Bellofiore, 2013. "'Two or three things I know about her': Europe in the global crisis and heterodox economics," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 37(3), pages 497-512.
  • Handle: RePEc:oup:cambje:v:37:y:2013:i:3:p:497-512
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    Cited by:

    1. Alberto Botta & Eugenio Caverzasi & Daniele Tori, 2015. "Financial–Real-Side Interactions in an Extended Monetary Circuit with Shadow Banking: Loving or Dangerous Hugs?," International Journal of Political Economy, Taylor & Francis Journals, vol. 44(3), pages 196-227, July.
    2. Zeilbeck, Severin, 2015. "An investment initiative for fiscally constrained EU member states: The role of synergetic financial instruments," IPE Working Papers 58/2015, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    3. Rinaldo Evangelista, 2015. "Technology, development and economic crisis: the Schumpeterian legacy," Working Papers 23, Birkbeck Centre for Innovation Management Research, revised Jun 2015.
    4. Fusheng Xie & Jiateng Wang & Zhi Li, 2023. "The Greek Crisis Under Structural Constraints," Review of Radical Political Economics, Union for Radical Political Economics, vol. 55(2), pages 309-332, June.
    5. Ramazzotti, Paolo, 2014. "Veblen, Economic Policy and the Present Crisis," European Journal of Economic and Social Systems, Lavoisier, vol. 26(1-2), pages 73-90.
    6. Riccardo Bellofiore, 2014. "The Socialization of Investment, from Keynes to Minsky and Beyond," Economics Working Paper Archive wp_822, Levy Economics Institute.
    7. Nikolaos Antonakakis & Ioannis Chatziantoniou & David Gabauer, 2021. "The impact of Euro through time: Exchange rate dynamics under different regimes," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 1375-1408, January.
    8. L. Giordano & A. Lopes, 2016. "Monetary Policy, Credit and Territorial Imbalances in Europe in Crisis Times," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 1, pages 121-176.
    9. Moosa, Imad, 2016. "International Evidence on the Financial Kuznets Curve," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 69(4), pages 365-378.
    10. Emilios Avgouleas & Douglas W. Arner & Uzma Ashraf, 2014. "Regional financial arrangements: lessons from the Eurozone crisis for East Asia," Chapters, in: Iwan J. Azis & Hyun S. Shin (ed.), Global Shock, Risks, and Asian Financial Reform, chapter 10, pages 377-415, Edward Elgar Publishing.
    11. Nocera, Silvio & Tonin, Stefania & Cavallaro, Federico, 2015. "Carbon estimation and urban mobility plans: Opportunities in a context of austerity," Research in Transportation Economics, Elsevier, vol. 51(C), pages 71-82.
    12. Guido Traficante & Guglielmo Forges Davanzati, 2018. "La restrizione del credito in uno schema di teoria monetaria della produzione: il caso italiano," Moneta e Credito, Economia civile, vol. 71(283), pages 211-233.
    13. Giovanna Vertova, 2014. "What’s gender got to do with the Great Recession? The Italian case," Chapters, in: Riccardo Bellofiore & Giovanna Vertova (ed.), The Great Recession and the Contradictions of Contemporary Capitalism, chapter 11, pages 189-207, Edward Elgar Publishing.

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