The Golden Age of capitalism, when the major economies grew at over 4% real GDP a year and there was relatively moderate inflation and no significant fluctuation in employment i.e slumps, lasted just a short time – from about the late 1950s to the early 1970s.
After that, the major capitalist economies experienced a series of regular and recurrent slumps starting with the first simultaneous post-war international recession in 1974-5, the deep ‘double-dip’ recession of 1980-2, the industrial slump of 1990-2, the mild but global recession of 2001 and finally the Great Recession of 2008-9, the deepest and longest lasting slump since the 1930s Great Depression.
Mainstream macroeconomics did not see these recessions coming and even after they arrived, economists failed to consider their causes or even accept that what mainstream economics used to call ‘business cycles’ were back.
The Great Recession has forced the mainstream to consider causes and…
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