The Financial Crisis Reconsidered

The Mercantilist Origin of Secular Stagnation and Boom-Bust Cycles

Authors: Aronoff, Daniel

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About this book

In The Financial Crisis Reconsidered, Aronoff challenges the conventional view that reckless credit produced the US housing boom and the financial crisis, explaining how the large current account deficit, and its mercantilist origin, was a more fundamental cause. He also demonstrates that the decision to provide relief for bank creditors rather than underwater homeowners was responsible for the prolonged recession that followed the crisis.

Aronoff proposes a novel theory to account for the ultimate origins of secular stagnation and economic volatility. He shows how accumulation, which occurs when a person or country earns more than it ever plans to spend, generates both an excess of saving and a deficiency in demand. While savings provide the funds to promote booms, under-consumption ensures that these booms will turn bust and that the economy will fall short of its potential growth rate. Aronoff argues that mercantilists and top income earners engage in accumulation, and that the influence of both types has grown in recent decades. Combining economic theory and historical narrative, this book offers a new perspective of the housing boom and the financial crisis, concluding with innovative policy proposals to reduce accumulation without compromising the benefits of a market economy.

About the authors

Daniel Aronoff is President of Landon Companies, USA. He has served as Vice Chairman of the Board of Trustees of Grand Valley State University, USA. Throughout several decades of participation in the professional world, Aronoff has been a frequent contributor to many media outlets including the Financial Times.

Table of contents (14 chapters)

Table of contents (14 chapters)
  • The Metamorphosis of China‚Äôs Trade Policy

    Pages 3-13

    Aronoff, Daniel

  • The Current Account Deficit and the Housing Boom

    Pages 15-38

    Aronoff, Daniel

  • Mercantilism and the Current Account Deficit

    Pages 39-53

    Aronoff, Daniel

  • The Current Account Deficit: A Necessary Condition for the Housing Boom

    Pages 55-66

    Aronoff, Daniel

  • A Review of Explanations for the Housing Boom

    Pages 69-80

    Aronoff, Daniel

Buy this book

eBook n/a
  • ISBN 978-1-137-54789-7
  • Digitally watermarked, DRM-free
  • Included format: PDF
  • ebooks can be used on all reading devices
Hardcover n/a
  • ISBN 978-1-137-55368-3
  • Free shipping for individuals worldwide
Softcover n/a
  • ISBN 978-1-349-57547-3
  • Free shipping for individuals worldwide

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Bibliographic Information

Bibliographic Information
Book Title
The Financial Crisis Reconsidered
Book Subtitle
The Mercantilist Origin of Secular Stagnation and Boom-Bust Cycles
Authors
Copyright
2016
Publisher
Palgrave Macmillan US
Copyright Holder
The Editor(s) (if applicable) and The Author(s)
eBook ISBN
978-1-137-54789-7
DOI
10.1007/978-1-137-54789-7
Hardcover ISBN
978-1-137-55368-3
Softcover ISBN
978-1-349-57547-3
Edition Number
1
Number of Pages
XVII, 291
Topics