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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.
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Table of contents (14 chapters)
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Front Matter
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The Current Account Deficit and the US Housing Boom: Establishing the Connections
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Front Matter
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The Capital Flow Bonanza, the Credit Explosion, and the US Housing Boom: Channels of Transmission
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Front Matter
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Accumulation and Secular Stagnation: Identifying the Underlying Malady
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Front Matter
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The Financial Crisis, I: The Meltdown and the Successful Initial Policy Response
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Front Matter
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The Financial Crisis, II: The Limits of Conventional Policy in a Balance Sheet Recession
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Front Matter
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Policy Options: How to Exit the Balance Sheet Recession and End Secular Stagnation
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Front Matter
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About the author
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.
Bibliographic Information
Book Title: The Financial Crisis Reconsidered
Book Subtitle: The Mercantilist Origin of Secular Stagnation and Boom-Bust Cycles
Authors: Daniel Aronoff
DOI: https://doi.org/10.1007/978-1-137-54789-7
Publisher: Palgrave Macmillan New York
eBook Packages: Economics and Finance, Economics and Finance (R0)
Copyright Information: The Editor(s) (if applicable) and The Author(s) 2016
Hardcover ISBN: 978-1-137-55368-3Published: 20 January 2016
Softcover ISBN: 978-1-349-57547-3Published: 05 June 2016
eBook ISBN: 978-1-137-54789-7Published: 08 April 2016
Edition Number: 1
Number of Pages: XVII, 291
Topics: Capital Markets, Economic History, Macroeconomics/Monetary Economics//Financial Economics, Financial History, Public Finance, Public Economics