Lies and Truth About the Financial Crisis in the Eurozone: From a Banking Crisis to a Currency Crisis-The Veil of a Dramatic Structural Crisis

By integrating Richard Koo's general theory of balance sheets and the general monetary circuit approach through a genuine stock flow analysis, I prove that the two financial crises in the eurozone, the banking and the currency crises, were caused by disastrous policy choices of governments impo...

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Bibliographic Details
Published in:International journal of political economy 2010-12, Vol.39 (4), p.31-55
Main Author: Parguez, Alain
Format: Article
Language:English
Subjects:
accelerator and multiplier
balance sheet
Balance sheets
Bank assets
Bank liabilities
Bank loans
Bank stocks
Banking crises
Banking industry
Economic crisis
Economic theory
employment function
Euro Zone
Eurozone
exchange rate
Monetary policy
Net worth
Political economy
Public debt
real and false money
Studies
Citations: Items that this one cites
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Summary:By integrating Richard Koo's general theory of balance sheets and the general monetary circuit approach through a genuine stock flow analysis, I prove that the two financial crises in the eurozone, the banking and the currency crises, were caused by disastrous policy choices of governments imposing shock therapy policies for at least forty years. Banks played a passive role in striving to save their net worth. They also had to react to a private capitalist system more and more tempted to play a purely predatory/parasitical role. Finally, the absurd structure of the eurozone worsened an otherwise disastrous situation. Europe is doomed to an increase in public debt and is heading toward long-term instability. Salvation is possible, but not within the straitjacket of the eurosystem aimed at the dismantling of the state.
ISSN:0891-1916
1558-0970
DOI:10.2753/IJP0891-1916390402