+2 votes
asked ago in General Economics Questions by (140 points)
On the 10-year anniversary of the financial crisis, The Economist and several other "worth to read" magazines, ask if and how economics has changed in these ten years.  Rather than asking how we have changed, one should have asked how we can contribute.  That would make the discussion more constructive and focused on the issue - avoiding or limiting a new financial crisis with all the private and social costs that follow.

1 Answer

–1 vote
answered ago by (2.7k points)
I have developed a model of business negative cycles that depicts the reality of a crisis. We are always putting our attention on the financial share of a crisis and we are not going deep into the matter. We have to assume that the negative cycles are an error in the capitalism that repeat themselves again and again. It's true that the economic crisis affect the financial sector but it isn't the main factor that create the whole economic crisis. We are focusing on an element of the crisis not on the main factor. The information I have is sensitive and I can't explain it through here. When the economic cycle is reaching a peak everybody wants to earn a bigger profit. In this case the builders tried to earn bigger profits and the banks too giving credit without security. The business cycle turned into a negative cycle due to a few unwavering facts that repeats again and again and the growth stopped and turned into depression making the people who would be capable in the future to pay the credits due to the economic growth, unable to pay their debts (I assume that a lot of them were not going to pay anyway). We focus on the financial sector but it is only an element of the equation. Sorry if my English is not perfect I was born in Spain.