Economic Events, Policies, and Crisis

Abstract

Post-war economic policy is traced through Keynesian demand management and two variants of monetarism. The standard behavioural explanation of the 2007 economic crisis in terms of bad banks and poor government regulation is challenged by a more structural explanation focussing on inadequate aggregate demand supplemented by a huge growth in consumer debt. Post-crisis policies of tighter financial regulation, quantitative easing, and austerity policy are analysed and critiqued. QE raised asset prices, increased inequality, but failed to stimulate the economy. Austerity policy has caused huge unnecessary social harm.