Globalisation, inequality and the economic crisis

Nuno Martins*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

25 Citations (Scopus)

Abstract

This article addresses the effects of inequality on the globalisation process. It is argued that the recent financial and economic crisis is a manifestation of a tendency of the aggregate demand to fall relatively to aggregate supply, generated by an asymmetric income distribution, which in turn both increases, and is reinforced by, the mobility of goods, capital and labour, in a process of cumulative causation. This process has not become manifest earlier due to counteracting tendencies generated by the financial system, that were disrupted during the crisis. It is also argued that mainstream economics does not have the adequate framework for explaining the crisis, and actually contributed to the crisis through its theories and policies. Hence an alternative economic framework is suggested for addressing the crisis, drawing upon the contributions of several heterodox economic traditions, especially post-Keynesianism.
Original languageEnglish
Pages (from-to)1-18
Number of pages18
JournalNew Political Economy
Volume16
Issue number1
DOIs
Publication statusPublished - Feb 2011

Keywords

  • Aggregate demand
  • Crisis
  • Globalisation
  • Heterodox economics
  • Income distribution
  • Inequality
  • Keynes
  • Marx

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