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The crisis and beyond: thinking outside the box

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  • Hillinger, Claude

Abstract

In this paper the author attempts an analysis of the current financial/economic crisis that is wider ranging and more fundamental than he has been able to find. For this purpose he reviews some social science literature that views the current crisis as an episode in the secular decline of the United States and more generally of the Western Democracies. The timidity of current reforms, which is striking when compared to those that followed the excesses of the Gilded Age and the Great Depression, can be understood in this framework. The author discusses alternatives to the financial bailouts and shows how the crisis could have been dealt with more efficiently and at little cost to taxpayers. Finally, he discusses fundamental reforms that would greatly reduce the volatility of financial markets and increase their efficiency.

Suggested Citation

  • Hillinger, Claude, 2010. "The crisis and beyond: thinking outside the box," Economics Discussion Papers 2010-1, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwedp:20101
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    References listed on IDEAS

    as
    1. Hillinger, Claude, 2008. "Science and Ideology in Economic, Political and Social Thought," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 2, pages 1-70.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 215-268, November.
    3. Raghuram G. Rajan, 2013. "The Credit Crisis and Cycle-Proof Regulation," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 461-467.
    4. Reinhart, Carmen & Rogoff, Kenneth, 2009. "This Time It’s Different: Eight Centuries of Financial Folly-Preface," MPRA Paper 17451, University Library of Munich, Germany.
    5. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    6. Gerald P. Dwyer & Rik Hafer, 1999. "Are money growth and inflation still related?," Economic Review, Federal Reserve Bank of Atlanta, vol. 84(Q2), pages 32-43.
    7. Gorton, Gary B., 2010. "Slapped by the Invisible Hand: The Panic of 2007," OUP Catalogue, Oxford University Press, number 9780199734153.
    8. Snower, Dennis J., 2009. "Redistribution through the Geithner Plan," Open Access Publications from Kiel Institute for the World Economy 32968, Kiel Institute for the World Economy (IfW Kiel).
    9. Liebowitz Stan J, 2009. "ARMs, Not Subprimes, Caused the Mortgage Crisis," The Economists' Voice, De Gruyter, vol. 6(12), pages 1-5, November.
    10. Hillinger, Claude, 2008. "How to deal with the US financial crisis at no cost to the taxpayer," Discussion Papers in Economics 6929, University of Munich, Department of Economics.
    11. Telser Lester G, 2008. "Securing the Means of Payment: The Ultimate Requisite of a Modern Economy," The Economists' Voice, De Gruyter, vol. 5(3), pages 1-6, July.
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    Cited by:

    1. Musgrave, Ralph S., 2010. "The flaws in Keynsian borrow and spend," MPRA Paper 25434, University Library of Munich, Germany.
    2. Musgrave, Ralph S., 2014. "The Solution is Full Reserve / 100% Reserve Banking," MPRA Paper 57955, University Library of Munich, Germany.
    3. Musgrave, Ralph S., 2011. "Consolidation causes little austerity," MPRA Paper 34295, University Library of Munich, Germany.

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    More about this item

    Keywords

    Deficit financing; financial crisis; financial instability; full reserve banking; toxic assets;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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