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The Great Recession

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From Keynes to Piketty

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Abstract

According to many economists the Great Moderation was supposed to last. However, in September 2008, the Great Recession broke out when Lehman Brothers, a New York-based investment bank, collapsed and the Great Moderation ended abruptly. The author’s summary of New Yorker staff writer John Cassidy’s How Markets Fail (2009) provides a sobering insight into the failure of neoclassical economics to predict or to prevent the Great Recession. Cassidy underscores the damage done by the process of deregulation of America’s financial sector. The neoclassical assumptions of economic subjects’ rational behaviour and of the functioning of markets are scrutinised by Cassidy, while confronting the neoclassical theory (which he calls utopian economics) with what economists belonging to other schools of thought have to offer. A brief biography of John Cassidy completes the chapter.

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Notes

  1. 1.

    The edition used of John Cassidy, How Markets Fail: The Logic of Economic Calamities, was published by Allen Lane (London) in 2009.

  2. 2.

    Cassidy, How Markets Fail, 98.

  3. 3.

    Ibid., 159.

  4. 4.

    Ibid., 177.

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    Peter de Haan

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de Haan, P. (2016). The Great Recession. In: From Keynes to Piketty. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-60002-8_7

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  • DOI: https://doi.org/10.1057/978-1-137-60002-8_7

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