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THE CRISIS OF THE EARLY 21st CENTURY: GENERAL INTERPRETATION, RECENT DEVELOPMENTS, AND PERSPECTIVES
Abstract
The current crisis is analyzed as a crisis of "neoliberalism," a social order established in the wake of the structural crisis of the 1970s, to the benefit of upper classes, that is, capitalist and managerial classes. The crisis was the expression of the inner contradictions of this social order. On the one hand, the quest for high income on the part of these classes led to the extraordinary expansion of financial mechanisms and globalization. On the other hand, the US macroeconomy followed an unsustainable trajectory of disequilibrium (as the deficit of foreign trade). This fragile trajectory was destabilized by the subprime crisis. Credit and demand policies were conducted. The crisis entered into a second phase whose main feature was the crisis of sovereign debt. The action (quantitative easing) of the Federal Reserve was spectacular in the United States. In Europe the lack of governance and solidarity slowed down the bailout of the most affected economies, but the consequences on the rate of exchange of the euro remained very limited. The crisis will be long in the old world, though the "national factor" in the United States, confronted with the loss of its international hegemony, could stimulate much more active policies. Many countries in the periphery are now growing more rapidly, defining a new international configuration.
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References
Duménil, G., and D. Lévy (2001) [1998] "Costs and Benefits of Neoliberalism: A Class Analysis," Review of International Political Economy 8, 4: 578-607. First published in French.
--- (2011a) The Crisis of Neoliberalism. Cambridge, MA: Harvard University Press.
--- (2011b) The Crisis of the Early 21st Century: A Critical Review of Alternative Interpretations. Paris: PSE, EconomiX.