A “Macroneconomic” Revolution?
Since the global financial crisis began a decade ago, there has been no shortage of useful ideas for ameliorating economic conditions and alleviating public resentment. The real question is why so few of them have been implemented.
LONDON – Next month will mark the tenth anniversary of the global financial crisis, which began on August 9, 2007, when Banque Nationale de Paris announced that the value of several of its funds, containing what were supposedly the safest possible US mortgage bonds, had evaporated. From that fateful day, the advanced capitalist world has experienced its longest period of economic stagnation since the decade that began with the 1929 Wall Street crash and ended with the outbreak of World War II ten years later.
A few weeks ago, at the Rencontres Économiques conference in Aix-en-Provence, I was asked if anything could have been done to avert the “lost decade” of economic underperformance since the crisis. At a session entitled “Have we run out of economic policies?” my co-panelists showed that we have not. They provided many examples of policies that could have improved output growth, employment, financial stability, and income distribution.
That allowed me to address the question I find most interesting: Given the abundance of useful ideas, why have so few of the policies that might have ameliorated economic conditions and alleviated public resentment been implemented since the crisis?