Stages in the new debt deflation fisher-minsky crisis

19 June 2009 by Arturo Guillén R.

1. Introduction

The aim of this paper [1]
is to analyze the current phase of the global crisis that began in the United States in 2007 as a financial crisis linked to sub-prime mortgages. The current phase, which began during the last quarter of 2008, is characterized by the interaction of the financial crisis —far from having been overcome— and the deepening and universal expansion of the recession in production. I will go into this in greater detail further along. Section 2 summarizes my position about the nature of the global crisis. Section 3 presents a proposal about the stages this crisis has already gone through. Section 4 examines the advance of the recession in the world economy; and Section 5 focuses on the development of deflation. Finally, Section 6 presents some conclusions and perspectives for the future.

2. About the Characterization of the Global Crisis

As I put forward in a previous paper (Guillén 2009), the global crisis is the most
important capitalist crisis since World War II. It is a new type of debt-deflation crisis, highlighting the limits of the finance-dominated regime of accumulation in place since the 1980s and characterized, among other things, by securitization, that is, a financing regime based on issuing securities and derivatives Derivatives A family of financial products that includes mainly options, futures, swaps and their combinations, all related to other assets (shares, bonds, raw materials and commodities, interest rates, indices, etc.) from which they are by nature inseparable—options on shares, futures contracts on an index, etc. Their value depends on and is derived from (thus the name) that of these other assets. There are derivatives involving a firm commitment (currency futures, interest-rate or exchange swaps) and derivatives involving a conditional commitment (options, warrants, etc.). .

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[1Paper presented at the 6th International Conference Developments in Economic Theory and Policy ( Bilbao, Spain. July 2-3, 2009.

Arturo Guillén R.

Arturo Guillén. Profesor – Investigador del Departamento de Economía la Universidad Autónoma Metropolitana Iztapalapa. Profesor del “Posgrado en Estudios Sociales, Línea Economía Social” de la misma Universidad. Coordinador General de la Red de Estudios sobre el Desarrollo Celso Furtado ( Miembro del Sistema Nacional de Investigadores. E-mail: artguillenrom at Fax: 55 5612 5682.



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