Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky
This article provides a historical and theoretical overview of the mechanism leading up to financial crises and financial bubbles. It suggests that the potentially explosive growth of the financial sector at the expense of the real economy fed by compound interest has-since before ancient mesopotami...
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| Format: | Article |
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Penerbit Universiti Kebangsaan Malaysia
2012
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| Online Access: | http://journalarticle.ukm.my/5833/ |
| _version_ | 1848810958999257088 |
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| author | Erik S.Reinert, |
| author_facet | Erik S.Reinert, |
| author_sort | Erik S.Reinert, |
| building | UKM Institutional Repository |
| collection | Online Access |
| description | This article provides a historical and theoretical overview of the mechanism leading up to financial crises and financial bubbles. It suggests that the potentially explosive growth of the financial sector at the expense of the real economy fed by compound interest has-since before ancient mesopotamia under the rule of Hammurabi-represented a real threat for such crises. A more modern and additional factor that builds up crises is Joseph Schumpeters observation of the clustering of innovations.Carlota Perez has more recently developed Schumpeters vision into a theory of techno-economic paradigms which - about midway in their trajectory-produce a build-up to financial crises. The theories of Schumpeterian economist Hyman Minsky, which describe the mechanisms leading to the collapse of financial bubbles, complete the overview. The article ends with recommendations to bring the West out of the present crisis by - once again -putting the real economy, rather than the financial economy, in the drivers seat of capitalism. |
| first_indexed | 2025-11-14T23:38:47Z |
| format | Article |
| id | oai:generic.eprints.org:5833 |
| institution | Universiti Kebangasaan Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T23:38:47Z |
| publishDate | 2012 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | oai:generic.eprints.org:58332013-01-14T01:41:58Z http://journalarticle.ukm.my/5833/ Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky Erik S.Reinert, This article provides a historical and theoretical overview of the mechanism leading up to financial crises and financial bubbles. It suggests that the potentially explosive growth of the financial sector at the expense of the real economy fed by compound interest has-since before ancient mesopotamia under the rule of Hammurabi-represented a real threat for such crises. A more modern and additional factor that builds up crises is Joseph Schumpeters observation of the clustering of innovations.Carlota Perez has more recently developed Schumpeters vision into a theory of techno-economic paradigms which - about midway in their trajectory-produce a build-up to financial crises. The theories of Schumpeterian economist Hyman Minsky, which describe the mechanisms leading to the collapse of financial bubbles, complete the overview. The article ends with recommendations to bring the West out of the present crisis by - once again -putting the real economy, rather than the financial economy, in the drivers seat of capitalism. Penerbit Universiti Kebangsaan Malaysia 2012-06 Article PeerReviewed Erik S.Reinert, (2012) Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky. Jurnal Ekonomi Malaysia, 46 (1). pp. 85-100. ISSN 0127-1962 http://www.ukm.my/penerbit/jem.htm |
| spellingShingle | Erik S.Reinert, Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky |
| title | Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky |
| title_full | Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky |
| title_fullStr | Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky |
| title_full_unstemmed | Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky |
| title_short | Mechanisms of financial crises in growth and collapse;Hammurabi,Schumpeter,Perez, and Minsky |
| title_sort | mechanisms of financial crises in growth and collapse;hammurabi,schumpeter,perez, and minsky |
| url | http://journalarticle.ukm.my/5833/ http://journalarticle.ukm.my/5833/ |