- Record: found
- Abstract: found
- Article: found
Why Did the World Economic Crisis of 2008-2009 End in the Great Recession? A Critical Comparison of the Great Depression and the Great Recession
Abstract
In this article, I will discuss the reasons why the US economic crisis of 2008-2009 ended in the Great Recession from a Marxist perspective. First, I will discuss a Marxist financial crisis theory. My conclusion is the formation of fictitious capital plays a crucial role in accelerating the economic growth process, creates economic over-sensitiveness and eventually leads to a crisis. Second, I will present a historical process of the Great Depression in the United States from a perspective of financial crisis. In those days, the gold reserves of Federal Reserve Banks should not be less than 40% against note liabilities. However, the government set up the Reconstruction Finance Corporation in 1932 and took an aggressive monetary policy under the gold standard. Therefore the United States was finally compelled to abandon the gold standard in 1933. Third, I will discuss the financial crisis of 2008-2009 and show its difference from the Great Depression in the 1930s. And finally, I will try to critically compare the Great Depression with the Great Recession from a Marxist financial crisis theory.
Content
Author and article information
References
Bagehot, W. 1924. Lombard Street: A Description of the Money Market. London: Murray.
Baily, M. N., R. E. Litan, and M. S. Johnson. 2010. “The Origins of the Financial Crisis.” In Lessons from the Financial Crisis, edited by R. W. Kolb, 79-85. Hoboken: John Wiley & Son.
Ballantine, A. A. 1948. “When All the Banks Closed.” Harvard Business Review 26 (2): 129-143.
Bardhan, A. 2010. “Of Subprimes and Sundry Symptoms: The Political Economy of the Financial Crisis.” In Lessons from the Financial Crisis, edited by R. W. Kolb, 17-22. Hoboken: John Wiley & Son.
Board of Governors of the Federal Reserve System. 1943. Banking and Monetary Statistics. Washington, DC: Board of Governors of the Federal Reserve System.
Brookings Institution. 1936. The Recovery Problems in the United States. Washington, DC: Brookings Institution.
Burgess, W. R. 1931. “The Money Market in 1930.” Review of Economics and Statistics 13 (1): 19-25.
Council of Economic Advisers. 2010. Economic Report of the President. Washington, DC: Council of Economic Advisers.
Federal Reserve Agent of Second Federal Reserve District. 1930. Fifteenth Annual Report of Federal Reserve Bank of New York. New York: Federal Reserve Agent of Second Federal Reserve District.
Federal Reserve Board. 1930. Federal Reserve Bulletin, vol. 16, no. 1. Washington, DC: Federal Reserve Board.
Federal Reserve Board. 1932. Federal Reserve Bulletin, vol. 18, no. 1 and no. 2. Washington, DC: Federal Reserve Board.
Federal Reserve Board. 1933. Federal Reserve Bulletin, vol. 19, no. 1. Washington, DC: Federal Reserve Board.
Friedman, M., and A. Schwartz. 1963. A Monetary History of the United States 1867-1960. New Jersey: Princeton University Press.
Galbraith, J. K. 1954. The Great Crash 1929. Cambridge: Houghton Mifflin.
Harvey, D. 1982. The Limits to Capital. Oxford: Basic Blackwell.
Kimmel, L. H. 1959. Federal Budget and Fiscal Policy: 1789-1958. Washington, DC: Brookings Institution.
Martin, J. D. 2010. “A Primer on the Role of Securitization in the Credit Market Crisis of 2007.” In Lessons from the Financial Crisis, edited by R. W. Kolb, 199-207. Hoboken, NJ: John Wiley & Son.
Marx, K. 1977. Capital, vol. 1. Translated by B. Fowkes. New York: Vintage.
Marx, K. 1981. Capital, vol. 3. Translated by D. Fernbach. London: Penguin Books.
Samuelson, P. A., and H. E. Krooss. 1969. Documentary History of Banking and Currency in the United States, vol. 4. New York: McGraw-Hill.
Sobel, R. 1968. Panic on Wall Street: A History of America's Financial Distress. New York: Collier Books.
Temin, P. 1989. Lessons from the Great Depression: The Lionel Robbins Lectures for 1989. Cambridge: The MIT Press.